Jobs likely around distressed property investment

Tumbling property prices within the Gulf region this year are no secret, with the previously rapidly expanding market suddenly slamming into reverse in 2009. However, some investment firms spy an opportunity, and the number of distressed property funds is on the rise.

Property prices in Dubai have fallen by 50% from their 2008 peak, according to some estimates, and analysts at UBS are predicting a further 20-30% decline before the market bottoms out. Property sales in both Abu Dhabi and Bahrain remain weak, according to studies by CB Richard Ellis.

Large projects like the Palm Deira and Waterfront have been put on hold, and even state-owned developers like Nakheel have been shedding jobs by the hundreds.

But some firms, such as US real estate company Hines, Cirrus Developments and Mayfair Wealth Management, have rolled out distressed property funds in a bid to capitalise on the gloom. Invest AD is also looking to raise $200-500m for a distressed opportunities fund.

Job opportunities look likely in the near future.

James Wakefield, regional director of specialist property investment head hunter Cobalt Abu Dhabi, says: "A number of firms are now beginning to focus on distressed property investment, but recruitment activity is currently still subdued as the larger firms transfer people internally to focus on this sector. There are exceptions to this, however, and some firms have been recruiting -these tend to be smaller family offices."

Ched Riley, real estate analyst at Nomura in Dubai, told Financial News that he estimates around $2bn has so far been raised for distressed property funds. "Though none of the funds have deployed capital yet," he added.