Exclusive outtakes from industry leaders
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.”
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.
“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.
Scott Latham, one of the most powerful commerical real estate brokers in New York, says that Chinese investors are making approaches to buy Manhattan properties.
“They are coming,” he told the Reuters Global Real Estate Summit in New York on Monday. “We’ve seen them in the bidding process over the past four months on a number of assets we’ve handled.”
The FBI unveiled “Operation Malicious Mortgage” and charged more than 400 people of fraud.
The same day that two former Bear Stearns hedge funds managers were arrested and indicted for securities fraud, the FBI unveiled a big mortgage fraud investigation.