How Are New Le­gal Frame­works Em­pow­er­ing Cre­ative In­vest­ing?

Forbes Middle East - - FORBES MIDDLE EAST BUILDING THE FUTURE -

In­no­va­tion is the driv­ing force that keeps mar­kets mov­ing for­ward. Some of these new in­no­va­tions al­low in­di­vid­u­als to in­vest in real es­tate with­out the hefty price tag as­so­ci­ated with buy­ing prop­erty, such as REITs, crowd fund­ing and frac­tional part­ner­ships.

“There is an emer­gence of REITs in the re­gion, es­pe­cially in Saudi Ara­bia,” said Racha Alkhawaja, CDO of Equi­tativa Group. “There is def­i­nitely an ap­petite from in­vestors to look at al­ter­na­tive in­vest­ment prod­ucts and tar­get other sec­tors in the real es­tate mar­ket be­sides the con­ven­tional sec­tors in or­der to ben­e­fit from bet­ter yield.”

REITs are gain­ing trac­tion, not just amongst lo­cal in­vestors, but also in­ter­na­tional ones. With chang­ing laws and reg­u­la­tions and new op­por­tu­ni­ties, the Mid­dle East wants to at­tract new in­vestors into the re­gion. “Dubai orig­i­nally at­tracted high value in­vestors. In­vestors that bought high value plots and high value real es­tate. I think what the FDI is go­ing to do is reach a wider range of con­sumers; peo­ple who are look­ing for a se­cond home, peo­ple who are look­ing for an al­ter­na­tive in­vest­ment, or peo­ple who want to re­tire in this part of the world,” said Ab­dulla Gal­adari, Se­nior Part­ner at Gal­adari Ad­vo­cates and Le­gal Con­sul­tants. “The FDI ini­tia­tive is an ex­cel­lent ini­tia­tive. It will at­tract a lot of new in­vestors and I think it will cre­ate a lot of sta­bil­ity and stop fluc­tu­a­tion in the val­u­a­tion of the real es­tate mar­ket.”

The up­take of new fund­ing initiative­s from the gov­ern­ment might seem like a slow process, but they want to see re­sults and en­sure it is safe for in­vestors be­fore jump­ing head­first into some­thing, ex­plained Dr. Mahmoud Al­bu­rai, Se­nior ad­vi­sor in

RERA. They want to make it not only eas­ier for peo­ple to in­vest but more se­cure as well.

Saudi Ara­bia is a par­tic­u­larly ap­peal­ing mar­ket at the mo­ment. With all the changes that the King­dom has un­der­gone in the last cou­ple of years there are am­ple op­por­tu­ni­ties, not just in real es­tate, but across in­dus­tries. Makkah and Me­d­ina of­fer a unique op­por­tu­nity for Mus­lims to in­vest. Ac­cord­ing to Eng. Sami Ab­du­laziz Al Makhdoub, CEO of Knowl­edge Eco­nomic City there are cur­rently only eight mil­lion visas be­ing is­sued per year for tourists to visit Makkah and Me­d­ina. This num­ber is ex­pected to in­crease to 30 mil­lion visas in 10 years from now.

In­fla­tion is mak­ing it dif­fi­cult for mul­ti­ple mid­dle and low-in­come fam­i­lies to pur­chase their first prop­erty. Ac­cord­ing to Sid­diq Farid, CEO of Smart Crowd, home­own­er­ship will con­tinue to de­te­ri­o­rate across the world be­cause of af­ford­abil­ity and neg­a­tive ex­pe­ri­ences.

In­tro­duc­ing blockchain into the real es­tate mar­ket makes it more trans­par­ent and se­cure for all par­ties in­volved. Hav­ing the gov­ern­ment reg­u­late cre­ative in­vest­ments adds an ex­tra layer of se­cu­rity. While there will al­ways be some form of risk in­volved in any in­vest­ment, some are safer than oth­ers. They are each unique in their own way and in­vestors need to find some­thing that suits them. The most im­por­tant thing is to ed­u­cate your­self on the op­tions avail­able be­fore mak­ing any de­ci­sions.

“Dubai orig­i­nally at­tracted high value in­vestors. In­vestors that bought high value plots and high value real es­tate. I think what the FDI is go­ing to do is reach a wider range of con­sumers; peo­ple who are look­ing for a se­cond home, peo­ple who are look­ing for an al­ter­na­tive in­vest­ment, or peo­ple who want to re­tire in this part of the world.” - Ab­dulla Gal­adari

ENG. SAMI AB­DU­LAZIZ AL MAKHDOUB CEO Knowl­edge Eco­nomic City

Dubai Land Depart­ment

DR. MAHMOUD AL­BU­RAI Se­nior Ad­vi­sor in RERA

AB­DULLA GAL­ADARI Se­nior Part­ner Gal­adari Ad­vo­cates & Le­gal Con­sul­tants

CDO Equi­tativa Group

Lo­cal Part­ner

White & Case

SID­DIQ FARID CEO Smart Crowd

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