UAE Property Developers Spinning out of Control

According to several “reputable” property developers, Russia is not having a financial crisis. This is an article published today:

Cash-rich Russians are expected to invest more in the UAE real estate market, especially Dubai, given the attractive returns on investment, according to a property developer.

“About 26 per cent of investment in the UAE property market has come from Russians and we believe it will continue further,” Steve Nosrat, Marketing Director, Azizi Investments, told Emirates Business. “By showcasing our projects in Moscow, we are ensuring that they are aware of our developments. Moreover, it also offers us a good networking opportunity.”

Peter Riddoch, CEO, Damac Properties said: “More than 120 nationalities have bought our properties and the number is still growing. This includes a significant Russian customer base. We are confident about the Russian market and we expect a considerable increase in interest levels with regard to our projects in the UAE and Dubai in particular.”

More than 50 UAE-based developers will take part in the International Property Show Moscow 2008 from November 10 to 12.

“Russia’s financial market and the economy as a whole have shown considerable resilience in spite of the global financial turmoil. This has been a major factor in driving investors to Russia, especially in the property sector,” said Dawood Al Shezawi, Managing Director, Strategic Marketing & Exhibitions.

Source

To put things into context, Russian stock exchanges closed down for an hour this morning after prices abruptly fell through the floor. The rouble-denominated Micex index was down 14% in early afternoon trading while the dollar-denominated RTS fell 10%. Russian stock prices are down 50% in October and more than 70% since early July. Russian companies have already defaulted on $1 billion worth of bonds with more than $10 billion to be redeemed before the year is out; S&P downgraded the country’s sovereign debt to negative; money market rates are around 20% and Russian billionaires are scrambling to get out from under as oil prices plummet.

The Russian government is pouring it’s reserves into the economy at the rate of $15 billion per week.

I am not sure if this is just wishful thinking or out and out spin, but look out for some bargains in Dubai over the next 6 months……