Dubai is witnessing phenominal growth not only within the residential sector but also in the commercial, retail and office space sectors with demand far outstretching supply.
Rental yields at present can be as high as 20-25% with no signs of this diminishing in the near future. Below is the report from Jones Lang LaSalle
commercial investment property
| Record volumes of investment - up almost 40% - according new Jones Lang LaSalle report |
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| London, 5th March 2007 –The lion’s share of global real estate investment continues to target direct commercial real estate with US$682 billion invested in 2006, a surge of 38% over 2005, and nearly double 2003 volumes; according to Jones Lang LaSalle’s latest global real estate capital report, “Moving Further and Faster”.. New sources of capital are targeting the sector, increasing competition for assets in almost all markets. Globalisation of the asset class continues relentlessly, with cross border transactions now representing 42% of total investment volumes (up from 34% in 2005), and inter-regional investment reaching 29% (up from 23% in 2005) . In addition to direct commercial real estate investment ($682bn), investors privatised REITs and other listed real estate owning entities valued for $48bn, and purchased multi-family residential investments totaling $170bn , bringing global real estate investment to $900bn.
Tony Horrell, CEO of Jones Lang LaSalle’s International Capital Group, commented: “There is currently a large overhang of investment targeting the sector with $5 of money chasing every $1 of product. Global real estate markets performed very strongly throughout 2006; it was the first year that all major developed and emerging market returns were both aligned and positive. Investment was driven by increased allocations to the asset class, growth in investible stock and by the increased attention of opportunistic private equity players who identified relative value in the sector. These increased flows into real estate gave rise to two notable phenomena in 2006 – an increasing number of ‘mega-deals’, and continued globalisation of the asset class.” read the full report...
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