October 16, 2006

When Balancing Risk Against Returns: The GCC Real Estate Market is a Winner Sama Dubai commissions snap poll at MIPIM Asia 2006 revealing industry insights from key decision makers

Dubai, October 16, 2006 - According to a snap poll of 100 key real estate industry decision makers commissioned by Sama Dubai, the international real-estate investment and development arm of Dubai Holding at Asia’s premier property expo held in Hong Kong; MIPIM Asia in late September, when balancing risk against returns, 58% chose the GCC in particular Dubai over China and India. This was primarily because although both India and China have booming real estate markets and growth orientated economies, Dubai has been actively wooing investors far more by continuously rolling out new policies to encourage investment, which help improve the business environment, reduce tax burdens, and increase labour laws flexibility. It is also increasing cooperation with other governments especially in Asia, encouraging greater investment from both sides. The poll questioned investors, developers, corporate end-users, retailers, hotel group representatives and consultants/analysts from around the world, all of which believed that Asia’s level of attractiveness to foreign investors in future would increase as a result of its robust economic growth led by the taking off of China and India as well as the strong recovery in Japan. Hong Kong, Singapore, Korea, Malaysia and Taiwan will continue to see solid growth. India was seen as having the greatest growth potential (38%) with the GCC coming a close second (34%) and China coming in third (28%). India’s real estate market is very lucrative with a strong economy, growing demand and a housing shortage of 60 million units in residential alone. Shopping centres and multiplexes covering over 4.3 million square metres are due to be built in the next 24 months. The potential returns from upcoming tier-two cities such as Chandigarh, Chennai and Calcutta will be phenomenal. Farhan Faraidooni, CEO of Sama Dubai said: "Dubai has excellent logistics and infrastructure and these factors are taken into account when investors make decisions about where to locate their business. According to the snap poll Sama Dubai commissioned at MIPIM Asia 2006, respondents felt returns from India are slightly higher, as compared to Dubai, however these accrue over longer periods of investment." China with a forecasted economic growth of 9.9% according to the World Bank also has a very attractive real estate market with demand continuing to rise. The building market has reached new heights with some US$200 billion entering this sector in 2005 and 1.4 billion square metres currently under construction. According to the snap poll, challenges such as language and an over heating economy concerned investors although currently China is believed to be attracting the most investment (35%) followed by India (33%), Japan and the GCC tied (both at 12%), Australia (6%) and Korea (2%). Faraidooni said: "When it comes to making an investment the snap poll reveals, out of seven key factors, the three ranked highest in their order of importance are market conditions, micro and macro economic factors and rental prospects. In the GCC the Governments strive to outperform other countries on those very factors by continuously rolling out new policies to encourage investment, which help improve the business environment. As a result for example, commercial property prices in Dubai have climbed 200% in the past two years and are forecast to rise a further 50% a year until 2008. Also 11.6% of Dubai’s GDP is invested in tourism, including hotels and holiday homes. Feasibility studies have projected that investment could reach between US$41-54 billion. The rate of return on investment is estimated at 20-25%. With all 100 respondents believing that the GCC’s attractiveness to foreign investors in future will increase, it is not hard to imagine why. "However with 60% of respondents only ‘somewhat’ informed of the investment opportunities in the GCC and 92% wishing to know more, Sama Dubai are delighted to have been able to exhibit exciting new commercial and resort properties in the GCC and North Africa worth over US$20 billion, in Asia for the very first time successfully using MIPIM Asia 2006 to pursue international development opportunities in Asian markets where there is a high potential for real-estate sector growth," added Faraidooni. Functioning as a global market place with over 2,000 international participants, MIPIM Asia 2006, held from September 27 to 29 in Hong Kong, has provided a unique opportunity for industry decision-makers to meet, develop new business opportunities as well as partnerships in Asia and collaborate to shape the future of the rapidly expanding international real estate market. At the official opening of MIPIM Asia in hong Kong , Mr. Leung Chun Ying, Chairman North Asia of DTZ Debenham Hong Kong, keynote speaker at MIPIM Asia conference and officiating guest of the exhibition (middle) visited Sama Dubai's stand and greeted Mr. James Hackett Regional Director for Asia, Portfolio Management, Sama Dubai (right) with Mr. Paul Zilk, CEO of Reed MIDEM, organizers of MIPIM Asia (left). Mr. Leung is a current member of the Executive Council of the Hong Kong Government and also a member of the National Standing Committee of the Chinese People's Political Consultative Conference.