CPN - September 2008 - (Page 25) INDUSTRY PULSE INTERNATIONAL Dubai Dreams U.S. Investors, Developers Find Easy Entry in Booming Emirate By Amanda Marsh ubai’s tremendous rate of growth has been attracting plenty of real estate investors, and U.S. players are not impervious to the appeal.Though the Gulf Cooperation Council— an alliance of sovereign wealth funds, investment banks and private and commercial investors from the Persian Gulf area—has provided the primary power behind Dubai’s investment engine, foreign involvement has been increasing, and U.S. investors are well represented. “Dubai’s flexible fiscal policies, foreign freehold ownership and investment-friendly government have helped the country become a market ripe for investment from overseas,” said Ismail Murtada Sayed Hashim, managing director for NAI D Qatar and NAI Kuwait.“With all the right mechanisms in place … Dubai has become an attractive option for American investors and developers.” Dubai has few barriers to entry, thanks to the United Arab Emirates’ free economic zones, among them the Dubai International Financial Centre, Dubai Internet City, Dubai Media City and Jebel Ali Free Zone, noted Colliers International CEO for the United Arab Emirates John Davis. The country restricts foreigners’freehold ownership to roughly 30 designated areas, explained Simon Gray, head of the investment agency arm for Dubai-based Asteco Property The Palm Trump International Hotel & Tower is already achieving healthy returns from $3,000-per-square-foot sales of its residential portion, the highest rate in the Middle East. Management, an associated company of Savills.Those areas,though,provide plenty of development and acquisition opportunity. Real estate fundamentals are strong in what is effectively the business hub for the booming Middle East and North Africa region. Limited delivery of new office space and a vacancy rate of less than 2 percent have yielded a persistent undersupply, precipitating doubledigit year-over-year rental-rate growth since 2003,according to second-quarter data from Colliers.Average Class A rental rates totaled $88 per square foot during the second quarter of 2008, while Class B space came in at $47 per square foot. Dubai has also risen in popularity as a tourist destination, drawing 7 million visitors last year alone in a boost for the hotel market. RevPAR increased 16 percent from the second quarter of 2007 to the second quarter of 2008, reaching $286 in five-star hotels, according to Colliers. Residential and retail product have also performed solidly, Davis said. “While the scale of forthcom- Capmark Finance Inc. THE RIGHT SOLUTIONS™ $9.4 Billion CONSTRUCTION LOANS REFINANCE LOANS EQUITY 2007 Multifamily Originations FANNIE MAE LOANS FREDDIE MAC LOANS FHA LOANS #1 Originator of multifamily financing for Freddie Mac in 2007 #1 Originator of multifamily, healthcare and 202 refinance loans for HUD* #1 Originator of seniors housing financing for Fannie Mae in 2007 PERMANENT/INTERIM LOANS MEZZANINE LOANS/PREFERRED EQUITY ACQUISITION/REHAB LOANS For more information contact: Fannie Mae and Freddie Mac Programs, John Cannon, 215.328.1396, john.cannon@capmark.com Nationwide Loan Origination Network, William Ross, 214.363.5872, william.ross@capmark.com FHA/HUD Program, Karl Reinlein, 314.984.5510, karl.reinlein@capmark.com www.capmark.com ©2008 Capmark Financial Group Inc. All rights reserved. *Source: MBA’s 2007 Annual Originations Rankings Capmark Finance Origination Licenses: CA: CA Department of Corporations Finance Lender License (lending) & CA Dept. of Real Estate Broker License #00398180 (brokering); MI: Capmark Finance Inc., Michigan Real Estate Broker, Phone 248-208-3460; NV: Capmark Finance Inc., 1 East Liberty Street, 6th Floor, Suite 12, Reno, NV, Phone: 775-686-6690; NY: Capmark Finance Inc., New York Real Estate Broker. www.cpnonline.com • September 2008 • COMMERCIAL PROPERTY NEWS 25 http://www.capmark.com http://www.capmark.com http://www.cpnonline.com
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