The GCC real estate sector has attracted multibillion dollar investments from across the world over the past few years. The short-spike in oil prices up to mid 2008 and the subsequent return to moderate prices timed with the current global economic crisis point to a potential slowdown of activities in 2009. According to industry expert, the combined size of the GCC economies grew from US$822.2 billion in 2007 to US$1.04 trillion in 2008 but is expected to decline to $923.6 billion in 2009. These overall economic forecasts have compounded the negative sentiment in the market that would adversely impact some sub-sectors of the GCC economies in the coming year.

Changing the negative perception of the market is linked as much to the crisis of confidence amongst investors and the lay public as much as it is with providing sufficient liquidity in the market with appropriate policy support. It is only with strong economic growth that the real estate sector can bounce back and allow all market players to play their part in the pursuit of sustainable, shared and common goals. 

The ingredients for a turnaround of the economy and the real estate sector are all there - a growing population, the high influx into the region of expatriates with a liberal lifestyle and high standard of living, implementation of freehold property rights, a vibrant and flourishing tourism sector that boosts demand for freehold properties and investment. These are what made the regional real estate sector a safe haven for investors in the not-so-distant past and these are the ingredients that will rekindle this promise. The missing link is the return of market confidence supported by sufficient liquidity for the investors, developers and other players.  

GCC countries have been adopting ‘positive survival strategies’ - recapitalisation, retrenchment and restructuring - to manage liquidity and arrest the decline. They are continuing to provide a supportive policy environment and have not resorted  to protectionism or other regressive measures to overcome the economic crisis.   

There have been other measures as well to boost confidence in real estate investment. For example, GCC countries have focused on improving the laws governing investments to attract foreign companies to the region. They have also been focusing on bringing in more transparency into the real estate sector through regulatory mechanisms in order to minimize speculative activities.

These regulatory reforms will go a long way in instilling investor confidence and open the door wider for cross-border investments and cooperation. Corporates  will able to diversify their risk exposures through wider alliances with foreign companies, helping them to expand globally in the process.  With Islamic finance and banking continuing to take further root on a more global basis, there continues to be tremendous potential for Shariah-compliant investments in the real estate sector.

In the long run, the real estate market will continue to be an attractive asset class for  investment simply because properties will always be  demanded by an ever increasing population. Furthermore, a large pool of end-users and investors create an efficient market with the needs of several sellers and buyers constantly creating new segments.

BIPEX 2008 brought together 98 participants from across the UK, Portugal, India, Philippines, UAE, Kuwait, Oman, Saudi Arabia, Qatar, Jordan and Bahrain to showcase real estate and infrastructural projects worth of US$ 50 billion and attracting a record-breaking 13,500 footfalls.

BIPEX 2009, in its sixth edition has become a premium event in the property calendar of the Kingdom and comes at a time when market confidence has had a set-back. BIPEX has a crucial role to play in restoring confidence in the markets. In keeping with its successful tradition of bringing together all stake holders under one roof allowing for a free exchange of information, it is confident that BIPEX 2009 will be no different. BIPEX 2009 looks forward to providing a window to the future and being a catalyst in the growth of the real estate and property market in the Kingdom and surrounding territories.