Capital may see advent of IFs

Institutional funds (IFs) are expected to emerge in the Abu Dhabi real estate sector over the coming months because of buyers who will be looking for yield investment in properties that have recurrent income portfolios. "The nature of the real estate investor has changed over the past six months from speculative investment to long-term appreciation," said Gurjit Singh, chief property development officer of Abu Dhabi-based Sorouh Real Estate at Cityscape Abu Dhabi. "Institutional funds will start to emerge as a new trend in the real estate sector in Abu Dhabi due to the fact that such funds are looking for long-term investment with bargains that already reflect the market is starting to get the attention of mature patient investors. Real estate developers are expected to consider and diversify their investments in the sector. Since the off-plan property market is gone, buyers want to be the end-user tenants and such investors will appreciate long-term investment in properties that have recurrent income portfolios," he said. Singh said monetary policy needed to be changed to stabilise the sector where, "in parallel, developers and investors need to re-price their properties at a more logical level and to diversify the types of their projects to include more sectors of society." Singh said there was "so much to be learned and to be corrected in the real estate sector in different areas and market forces will accordingly stabilise and bring consolidation and confidence". Singh's comments came after Sorouh's earlier announcement that it would introduce a new customer plan, which would include reduction in sale prices, revision of built-up areas and re-scheduled payment plans for the Alghadeer multi-use community located between Dubai and Abu Dhabi. The company's move comes amid the current market circumstances and understanding of its customers. "All our previously announced projects, which are already in the construction stage, are in the process of completion and business is as usual," said Singh. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .