Landmark Investment management director Chris Purdon believes that emerging countries such as those in the Middle East have a lot to offer opportunistic real estate investors willing to make the effort to understand the different risk-reward characteristics.
Mr Purdon, who was previously a fund manager with Jardine Fleming in Hong Kong, is now based in Dubai with Landmark. His experience confirms that the real estate markets of Asia (excluding Hong Kong, Singapore and Tokyo) and the Middle East, offer a different hierarchy of challenges to those faced in more mature markets: “The key one being retaining control of one’s own destiny,” he said.
Foreign ownership regulations mean that in many Asian markets (Malaysia, Thailand, Indonesia and Vietnam, for example), foreign-domiciled investors operate at a distinct disadvantage to local players. This is also the case in many parts of the Middle East with strong cultural barriers erected to prevent foreigners owning longer-term interests in land.
However, Mr Purdon feels it is important to recognise that the situation is rapidly changing: “The introduction of the ‘freehold’ concept into the more advanced Gulf markets (Dubai and the UAE, Bahrain and Qatar) has meant that it is now possible for foreigners to acquire marketable longer-term interests in real estate which are broadly similar to those available in the more established markets. Institutional ownership is clearly desirable and it is important for them to recognise that the progress that has been made to date over such a relatively short period of time is in anyone’s terms quite remarkable.”