Social unrest puting a damper on Middle East real estate markets, says S&P report
Source: Standard & Poor's Ratings Services , Author: Posted by BI-ME staff
Posted: Thu April 14, 2011 12:18 pm

INTERNATIONAL. Standard & Poor's Ratings Services takes a closer look at the current landscape in property markets in the Arabic-speaking countries of the Middle East and North Africa (MENA) in a report published today titled "Social Unrest Rattles Middle East And North Africa Real Estate Markets."
"Popular unrest and political upheaval in the Arabic-speaking Middle East and North Africa countries is putting a damper on regional property markets," said Standard & Poor's credit analyst Tommy Trask, "and many real estate projects--planned or in progress--in areas directly affected are subject to delays and cancellations."

Hardest hit are the leisure and high-end residential segments. In addition, some real estate companies are obligated to address damages to buildings, resulting from looting and violent demonstrations.
The unrest has reduced tourism flows into some countries and triggered sharp falls in hotel occupancy rates, for instance, in Egypt (Arab Republic of Egypt; foreign currency BB/Negative/B, local currency BB+/Negative/B) and Tunisia (Republic of Tunisia; foreign currency BBB-/Stable/A-3, local currency BBB/Stable/A-3).

In our view, property investors will likely be wary of uncertainties linked to political transition or potential regime changes. Specifically, we see disputes about property titles as a mounting risk. In terms of property damages and losses due to business interruptions, we expect that the insurance industry will bear at least a portion of costs.

The strikes and transportation disruptions associated with the unrest will likely adversely affect local economies. At the same time, potentially higher cost of debt and increased government spending measures may weaken some governments' finances, in our opinion.

We expect the ensuing negative impact on the real estate sector in Arabic-speaking MENA countries to be more acute in those countries already undergoing political transition, such as Tunisia and Egypt, and in those countries currently experiencing civil unrest, namely Libya (Socialist People's Libyan Arab Jamahiriya; ratings suspended), Bahrain (Kingdom of Bahrain; BBB/WatchNeg/A-3), Yemen (not rated), and Syria (not rated).
As they face the impact of popular protests and political transition, real estate companies in the region are also confronting other risk factors, such as supply/demand imbalances, affordability of property and lack of mortgage financing. In our view, much work also remains to be done in shaping legal and regulatory frameworks for real estate activity in the region.



date:Posted: October 24, 2016
UAE. Blockchain can impact key areas of finance including retail payments infrastructure, remittances, FX trading, trade finance, capital markets and compliance activities; Booz Allen Hamilton identifies specific opportunities, recommends how the UAE can organize and co-ordinate efforts.
date:Posted: October 24, 2016
UAE. Business confidence in Middle East improves for second consecutive quarter, but remains low amid slumping growth rates; 44% of businesses report worsening conditions; UAE in stronger position as budget surplus relaxes austerity measures.
date:Posted: October 23, 2016
UAE. Al Masah Capital: Last week's pattern which showed up in most MENA markets, indicated weak trading activity that gave way to buying as bargain hunters stepped in.
UAE. First-time survey of CEOs undertaken by Oxford Business Group suggests that business sentiment across the GCC remains broadly positive; A lack of credible intelligence and information vacuums on what emerging markets can offer, remain a concern.
cheap wedding dresses on