Massive property boom in the Middle East

Th war in Iraq, rising oil prices have all materially affected the global economy. Yet in spite of an increase in overall instability in some countries, billions of pounds are being pumped into offices, residential schemes and hotel developments.

In the Middle East as a whole, property development and investment is booming. Foreign property ownership laws are being relaxed in countries such as UAE, Qatar, Oman and Saudi Arabia. The reconstruction work taking place in Iraq has led to a soaring demand for office and storage space in Kuwait and Qatar, while residential and retail developments are the big buzz in Dubai and Oman. Meanwhile, Bahrain is planning radical improvements in its tourism infrastructure. The country is also aiming to position itself as a regional financial hub, with the development of the $1.3 billion Bahrain Financial Harbour now well under way.

Qatar is expected to witness strong growth over the next five years, and is already attracting increased numbers of international investors. Residential development is booming in Dubai, despite foreign freehold ownership being a grey area. The market is driven by UK, German and Russian investors. These are also large numbers of investors from India, attracted as much by good returns as the fact that the purchase provides automatic residency rights.

In Cairo, a population boom has encouraged house builders. After six years of negotiations, mortgage laws will come into force in Egypt. These will cover both residential and commercial properties. Having weathered the storm through two Gulf wars, and the aftermath of a development boom, confidence is now returning to the Cairo office market.

Important Developments in the Middle East

Kuwait: The Kuwaiti property sector has been the biggest regional beneficiary of the war in Iraq, with demand for both office and storage space soaring over the past year. Last year, the sector benefited from around $6.4 billion of property transactions. The government recently announced plans to build a seaport on the island of Bubiyan, which is close to the Iraqi border. At the same time, Kuwait plans to spend around $3.5 billion of the transformation of Failaka Island into a major new tourist destination.

Qatar: Earlier this year, Qatar became the latest Middle Eastern country to relax its rules on the foreign ownership of land, following similar moves in the UAE two years ago.

Oman: Oman is developing an $865m scheme called "The Wave", coveering around 200 ha of coast, north of Seeb International Airport. Around 125 developers from across the region have expressed interest in developing parts of the proposed scheme. The Omani Government also has moved to extend freehold property ownership to expatriates working in the country.

Saudi Arabia: The real estate sector has exxpanded rapidly over the last three years, but a spate of violent attacks on foreigners recently has raised questions over future investment, and let to fears of a mass exodus of international occupiers from the Kingdom.

Bahrain: Bahrain is competing with Dubai to become the regional financial hub of the Middle East. The government is developing the $1.3 billion Bahrain Financial Harbour. Investment in tourism projects is also on the rise, with the $690m Al Green Desert Spa. Work is also under way on the Tal island resort development and the Al Marsa floating city.

Dubai: Dubailand will be a $5 billion mixes-use themed park comprising 45 separate projects. The Burj Dubai will be the tallest tower in the world at more than 560m when completed in 2007. The World will be a cluster of 250 artificial islands in shape of the countries of the world. Dubai Marina will comprise around 4.6 m square of development by 2007. Dubai International Financial Centre aims to become the leading financial hub in the region. International City comprises 800ha of development which developer Nakheel hopes will become a cetre for investors, traders and retailers. The central district comprises 34 plots. The centerpiece will be a tower up to 40 storeys high, providing 50,000 sq meters of offices with a shopping mall at its base. The Mall of Emirates is being developed by Majid Al Futtaim, and is believed to be the largest mall under construction outside North America.

Jobs in Dubai

Egypt: The Egyptian office market is still maturing, but there are signs that the pace is increasing. Large projects such as the 7,000 square meter City Stars office block and Nile City, a 35 storey tower are being completed. Rent is predicted to grow 20%. A lot of property in city centre areas is being granted to foreigners. These properties are providing an extremely attractive return on investment. Against all the odds, tourism is on the rise in Egypt. Italians, Germans, Russians, and the English are returning to Egypt's beaches. As a result, developers are looking to invest in the hotel market again.