Mint Leaf offers a search and acquisition service for commercial property for investment and owner occupation, in the following locations:

• The Middle East
• Central & Eastern Europe
• UK

In the past, our primary focus has been The Middle East; over recent years a number of locations across the Gulf region have drawn increasing interest from international real estate investors and occupiers in the office, retail and leisure property sectors. The region had one of the world's highest hotel occupancy rates driven by the world's fastest growing tourism and airport sectors.

The Gulf region's property prices rocketed and developments sold out off-plan. Towards the end of 2008 and during 2009 this situation changed as a result of the global economic downturn. The price of oil has dropped significantly from its peak in 2008 of USD 147 per barrel to USD 40-50 per barrel.

Multi-national corporate occupiers are less active and demand for off-plan property is close to non-existent in some locations. As completion of properties occur, many investors are unable to secure funding and as payment deadlines loom closer, a downward effect on prices is evident. That said, there are some lenders that have recently announced their intention to begin a relaxation of their lending criteria and this should assist with a much needed injection of liquidity into the markets.

Despite the current challenging conditions, the property market in some locations is remaining fairly stable. In Abu Dhabi for example, the market conditions are less bleak as a direct result of undersupply of accommodation. Residential demand remains high in Abu Dhabi and whilst investor confidence has been knocked, the effect has not been as marked here, than in other parts of the region.

Whilst we remain available to assist with acquiring property in this region, we would advise parties to exercise caution at the current time.


DUBAI:

• Dubai is the fastest growing city in the world.
• The government has a 20 year plan of development that started in 2000. £140 billion is being spent by the Gulf Emirate financed by the success of its oil industry.
• Dubai's population is predicted to increase from its current 1.4 million to 2 million by 2010 (Source: CBRE CB Richard Ellis).
• Dubai's tourist numbers in 2006 were 8 million and this number is predicted to rise to 10 million by 2011 (Source: Euromonitor International - Travel & Tourism in the UAE Report Oct 2007).
• £2 billion is being spent on a lavish sports and residential complex in a bid to host the 2020 Olympics.
• Dubai's Al-Maktoum International Airport, to be completed in 2012, will be the largest airport in the world, twice the size of London Heathrow.
• Dubailand, a state of the art theme park will be two and a half times the size of Disney World, Florida. It is expected to have 200,000 visitors per day.
• Dubai is set to become the 4th largest financial centre in the world after London, New York and Hong Kong. It is developing as a major commercial base for Western companies conducting business in the Middle East, which, until mid-end 2008 created a huge level of demand from expatriate workers, attracted to Dubai by tax free earnings. Since this time there has been an exodus of expatriate workers away from the region.
• Numerous major Blue Chip companies now have their head office based in Dubai, including Hewlett Packard, Canon, Dell, Sony, IBM and ICC. Overseas investors were previously showing a strong interest in the Dubai Marina alongside Media City, home to Microsoft, Cisco, Reuters and CNN.
• Dubai has an extremely favourable tax environment for foreign investors - no CGT or other property related taxes other than 'Municipality Tax' of 5% on annual rent.
• The quality of new build property is now a lot higher than has previously been the case, tenure is freehold, there is 100% foreign ownership and repatriation of profits, Fortune 500 multinational tenants and a number of developers offer guaranteed rental income for a set period of time.
• The purchase process in Dubai is very simple however, as we always advise our clients when purchasing property overseas, expert impartial legal advice should always be sought before committing to a purchase.
• Dubai is determined to have an internationally trustworthy and transparent code of practice to appeal to institutional investors. In 2007 the government introduced the Real Estate Regulatory Authority (RERA) and as part of this a mandatory requirement for escrow accounts to protect the interests of investors buying off-plan, further increasing investor confidence in Dubai.
• There has been minimal sales activity within the real estate market in Dubai in 2009, with a high volume of new supply across all property sectors. The departure of a high proportion of the expatriate workforce, coupled with new stock entry, has resulted in a sharp decrease in lease rates for residential apartments.
• Within the office market the availability of office space is outstripping demand as new completions add further pressure to existing stock. This, in tandem with the continuation of the economic downturn, is likely to produce a worsening picture throughout the rest of 2009.
• There is however now some evidence that price reduction is beginning to slow and we can be cautiously optimistic that the market bottom could be called before the end of 2009.

Whilst we remain available to assist with acquiring property in Dubai and surrounding areas, we would advise parties to exercise extreme caution at the current time.

Please note that the information above is relevant at the time of writing (July 2009) but could well be subject to change over the coming months.

© 2008 Mint Leaf Property Ltd
Company Registration No. 6461163
Regulated by RICS

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