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Middle East respondents to Colliers International's Q3 2010 Global Investor Sentiment Survey view the market as still approaching the bottom, putting the recovery at 4 O'clock on the 'Global Property Clock'."
In addition, 38 per cent of Middle East investor respondents expect to either expand or maintain their current level of real estate holdings over the next 12 months, against 25 per cent seeking to actively contract their portfolios. This represents a massive reduction in expansion plans compared to six months ago and implies an overall degree of risk management.
The Global Property Clock equates market cycles to specific times, with 12 O'clock representing the top of the market and six O'clock representing the bottom. Each six-hour period in between designates rising (after 6 O'clock, to 12 O'clock) or declining (after 12 O'clock, to 6 O'clock) cycles.
"The results of this survey suggest the Middle East real estate market has not moved at all over the last six months, but on the plus side, investors do believe the market is set to find its floor over the next year," said John Davis, regional CEO and director of Colliers International Global Investment Services.
Investors in the Middle East appear to have less expansionary strategies than six months previously, where 67 per cent of investors had said they were seeking to adopt expansionary strategies. A total of 63 per cent of those surveyed now say they would be looking to actively reduce risk levels and 25 per cent said that they would look to increase the diversification of their portfolio. The principal investment targets were a combination of major western cities such as London, New York, Paris and emerging markets such as China and India.
In terms of selling strategies, 50 per cent of Middle East investors intend to sell out of some of their domestic holdings over the next year compared to none with plans to sell any of their foreign real estate holdings. This further reinforces the view that investors from this region plan to grow their overseas holdings at the expense of their domestic ones as part of a risk-reduction strategy.
