Dubai has sufficient superlatives – record-setting landmarks unique in their size, cost or concept -- to last it for the next decade – so enough already, says Deyaar CEO Markus Giebel.

“I endorse having the tallest building in the world, the first seven-star hotel in the world, the palm,” he says. “What I don’t endorse are attempts to now outdo these superlatives…they are going to last us the next 10 to 15 years.”

Dubai is home -- amongst other attractions -- to the world's largest indoor ski slope, the world's tallest tower, and the world's first, albeit self-rated, seven-star hotel that also sports its own Rolls Royce fleet and helicopter landing platform. The global financial crisis brought a real estate boom in the emirate to a screeching halt, leading to a raft of new, hugely ambitious projects  -- including a 1-km high tower and the world's largest mall -- to be shelved or delayed.

All week, we have been meeting real estate executives at Reuters Global Real Estate Summit who have discussed the many different areas of concern that have spread throughout the sector.

Some have spoken about deleveraging. Some have told us about the shrinking of values. Others have said it’s a confidence game — as in, there isn’t any.

But J. Allen Smith, chief executive of Prudential Real Estate Investors, brought it all together for us quite nicely.

In Smith’s view, the real estate universe is subject to a confluence of all the above-mentioned problems and a few others as well. He sees it as a unique time and does not see a rebound for some time.

It’s a daunting time to be in the industry, for sure, but at the end of his comments (which you can hear by clicking on the link below) he is starting to see a glimmer of hope here and there. After the past couple years, even a glimmer is a pretty welcome thing.

Smith was one of our featured speakers at this year’s summit, which continues through the end of this week. Reuters has exclusively interviewed guests in our offices including New York, London, Shanghai, Mumbai, Sydney and others this week.

For more on Smith’s comments, please click on the attached link right below:

Allen Smith, CEO, Prudential Real Estate Investors

New York and a handful of other major U.S. cities are down, but will never be out as far as their commercial real estate goes, a leading New York real estate private equity investor said Monday at the Reuters Global Real Estate Summit.

“New York’s not going away- it’s THE global city.”

Second tier cities are another matter entirely, said Thomas Shapiro, president of GoldenTree InSite Partners. “We are a big believer in the big city theory which is that the bigger cities will continue do better, to the detriment of secondary cities.”

Companies always go to where the best talent is, he explained, meaning cities such as his big five– New York, LA, San Francisco, Boston and Chicago– remain magnets, their status self-perpetuating

“Goldman Sachs is not moving to Miami because the intellectual capital is in New York- ditto Boston, ditto San Francisco, ditto LA.”

Here’s Shapiro’s prognosis for how some other U.S. cities will fare as the real estate market recovers:

San Francisco: one of the top markets, Shapiro said, because “San Francisco has a diversified economy.”
Chicago: “It’s a boom and bust town, but it is an important center.”

But other, lower cost cities are cheap for a reason, Shapiro said:
Detroit: “It’s cheap but I will never be convinced it’s cheap enough- we have so many issues in the auto sector.”
New Orleans: “People always pitch New Orleans, ‘gee you can buy a fantastic building for $60 per square-foot, but $60 can still go to $30.”

(Reuters photo)

Remember the good old days where — if you lived in the United States anyway — people would talk about “emerging markets”?

We’d nod our heads knowingly, wishing these poor folks the best as they tried to accumulate the swell things we had bought for ourselves. We knew that residents of Mumbai or Caracas or somewhere would never attain the great things we had in such abundance here in the good old USA (Hummers; his and hers monogrammed dishtowels; zero down, 110% mortgages on houses we couldn’t afford … that kind of stuff), but we still wished them well.

So, here we are in 2009 and at this year’s Reuters Global Real Estate Summit we find that the new emerging market is … well, it’s right down the block.

According to our guest Tom Shapiro, president of GoldenTree InSite Partners private equity investment firm, the new emerging market in the real estate world is the United States.

Shapiro, in a lively discussion, spoke glowingly about his firm’s recent new business in Brazil and about other opportunities he was seeing outside the United States. But, while he said his firm had not made any investment in the U.S. in about two years, he was starting to look for opportunities and see some enthusiasm for deals to get done.

Shapiro said it was still to early to decide what inning the real estate meltdown was in, but he was starting to see some interest from the sidelines about what the “next big thing” would be — and with cities like New York, San Francisco and Boston as potential growth engines, he was a little hopeful.

Optimism this week has been pretty thin in the real estate world, so we need to take it where we can get it.

Shapiro was one of the featured speakers at this year’s global summit, which continues through the end of this week in New York, London, Shanghai and Kuala Lumpur.

For more of Shapiro’s comments, please click the link below and hear an audio clip:

Tom Shapiro, GoldenTree InSite

It’s not a motorcycle or a unicycle - we’re talking the overall real estate business cycle.

While the bulk of the focus at this year’s Reuters Real Estate Summit is on the commercial real estate side of the business, Richard Dugas, chief executive of Pulte Homes, spoke to us about how things look on the residential side of the aisle.

It remains pretty rough out there.

Dugas told us it was still difficult to predict where things stood and how the rest of 2009 would shape up, but he did sound somewhat hopeful that the sector had leveled off from its dramatically depressed levels seen during 2008.

The confetti was not going off and there was no champagne being passed around just yet, but after a ride south that the residential real estate and building industry has seen, “not getting much worse,” sounds a lot like “better”.

Dugas was one of the featured speakers at our annual Real Estate summit, which this year has guests across the globe in centers including New York, London, Beijing and Kuala Lumpur.

To hear Dugas’ comments, please click on the link below:

Richard Dugas, CEO Pulte Homes

Dubai's deepening real estate slump has brought unexpected benefits to its time-poor urban residents.

Speaking at the Global Islamic Financing Summit, Dr. Humayon Dar, CEO of Shariah-compliant consultancy BMB Islamic, said Dubai was a much nicer place to live now that the immature infrastructure system was not overwhelmed with construction traffic and armies of property speculators.

"When you got to Dubai you will find that right now, traffic is actually much less but people like me like it because I used to be stuck in that traffic all the time," Dar said, eyes agleam. "But now, going from A to B is so fun - I like it."

The desert city - famed for its dramatic skyline and commonly referred to as the Gulf's biggest building site - is reeling from a global meltdown in demand for its unique brand of luxury real estate.  Dozens of development projects worth billions of dollars have been axed, threatening the livelihood of thousands of construction workers and their families.

But those banking on a rapid rally in Dubai's property market can draw some comfort from Dar, who believes the city will recover quickly -- with a little help from its wealthy neighbours.

"People who know the market say actually this is the time to invest... In the past whenever there is a problem in Dubai, the big brother sitting in Abu Dhabi comes to rescue. This time they took their time because they wanted to teach a lesson to Sheikh Mohammed because he was trying to be a renegade boy.

"Many people say Dubai is just gone, hopeless. But Dubai will never, ever go away. It has achieved a level of economic development which will help him to come out of this crisis...My own assessment is that the worst is over," he said. "That is a statement you wouldn't hear from very many people."

This week we had the opportunity to speak with Mohsin Khan, Senior Fellow at the Peterson Institute for International Economics and the former head of the Middle East department at the International Monetary Fund, ahead of the 2009 Reuters Islamic Banking and Finance Summit. I asked him why he thought that the once red-hot market for Islamic bonds had slowed to a trickle. Khan says some of the largest issuers of Islamic bonds, or sukuk, were real estate developers and the reason corporations are reluctant to buy or issue sukuk these days is due in large part to the continuing decline in the value of real estate in Dubai. Click below to listen:
Kahn on sukuk issues from Reuters TV on Vimeo.

The days of Tom, Dick and Harry taking a shotgun in Dubai and shooting willy-nilly and renting a ballroom with big parties and all of it bearing fruit are over.

Got it? No? Here’s a translation:

Everyone considered themselves a developer amid Dubai’s property boom but the global credit crunch has put paid to the days when all you had to do was make a splashy announcement, draw in tons of money and flip a project as soon as it’s built.

Now, only those developers with long-term focus and relatively debt-free balance sheets will survive the tumult while small fry will have to pack up and leave, according to developers at the Reuters Middle East Investment Summit.

“I think right now it’s a very much more targetted approach,” said Markus Giebel, chief executive of Dubai developer, Deyaar. “Before you had a shotgun…people shoot and whether its hotels, residentials or offices everything bears the fruits. These times have now gone. We have to go back to basics.”

Or, as the executive chairman of Zabeel Investments put it: “”Let’s face it every Tom, Dick and Harry became a developer. Now is the time when you differentiate the men from the boys.”

Or the women from the girls but what’s really important is that there’s no room for small fish when big possums are on the prowl. Get that? No? OK, here’s a translation…

U.S. companies who think they can command the prices of a
bygone era from Middle East investors need to think again, says
Zabeel Investment’s executive chairman.

Because of the hype surrounding sovereign wealth funds from
oil-rich Gulf Arab states, in particular, U.S. corporate players
seem to have visions of “oil wells with taps” when they see an
Arab investor, Mohammed Ali al-Hashimi said at the Reuters
Middle East Investment Summit.

Zabeel has stakes in Sony, planemaker EADS and bought
a Las Vegas-based nightclub and restaurant developer last February.

“They think that because I look the way I look and I wear
this thing here (traditional head cover), I’m going to pay them
a lot more than their company is worth. It doesn’t work that
way, we’re not stupid.

“Corporates in the U.S. haven’t woken up to reality I think.
They’re living in a dream world.

Reality is that rich Middle Eastern investors need to focus
closer to home and protect their own backyards amid the global
financial crisis.

“I think the priority is here, it’s our bread and butter,
the reason for our success. I’m not trying to be patriotic but
in times like this, that’s where people should be focused I
think.”

So tough luck, troubled U.S. firms. But don’t despair just
yet:

“I still think opportunities in the U.S. are there and I’m
interested but until people get their heads out of the clouds
and become realistic, we’ll wait,” the Zabeel executive added.

Plain vanilla, in the box, straight financings are the future, or at least near future, of real estate deals, says Marathon Asset Managing Director Scott Schwartz.

“Either the Street kinda comes back and supplies leverage, or people have to get their returns without leverage. And right now we’re at a point where people have to get their returns without leverage. So that’s why there aren’t a lot of deals happening,” he said, speaking at the Reuters Global Real Estate Summit.

The heydey of commercial mortgage markets was greased by easy money from Wall Street banks, which routinely made short-term loans to investors who wanted to invest the proceeds in longer-term assets, such as commercial mortgage-backed securities. The onset of the U.S. credit crunch last summer has pinched banks’ balance sheets, forcing them to rein in the credit they provided to these investors.

(Photo credit: Reuters)