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-Myriad of opportunities up for grabs by real estate developers seeking regional expansion

The Iraqi economy currently abounds in myriad investment opportunities that provide investors with additional incentives to utilise the growing potential of this promising market, especially real estate developers. This comes at a time when Iraq needs to re-develop many of its essential services, including infrastructure, health, education, etc.

The weekly real estate report of Al Mazaya Holding says that property developers operating in the Gulf region and neighbouring Iraq have considerable experience and have the resources that enable them to work and contribute to the reconstruction of the real estate sector and the development of infrastructure facilities in Iraq. The report notes that these companies boast financial positions robust enough for them to accomplish all types and sizes of projects needed by Iraq at present.

Al Mazaya report pointed out that the real estate developers in the region have over the past several years opted for capturing investment opportunities in the region and in the entire world in order to benefit from the opportunities up for grabs abroad and to get better market shares created by the forces of supply and demand from time to time.

This trend – to capitalise on investment opportunities overseas – has been driven by the economic deceleration recorded across the region as a result of the fall in global oil prices and revenues, which in turn affected the pace of urban activity. However, a large number of real estate developers have managed to secure good growth rates that enabled them to carry out ambitious projects overseas, a fact which indicates that some developers have the potential to revitalise neighbouring economies, including Iraq, which is in a dire need of exceptional capabilities and expertise to address imbalances in the real estate, commercial and investment sectors.

Current industry reports indicate that there is a growing number of property companies taking faster steps towards capturing investment opportunities up for grabs across the Iraqi market, said Al Mazaya.

In the meantime, industry data show that the volume of non-oil trade between Iraq and the UAE reached $11 billion by the end of 2016, while UAE investments in Iraq are estimated at $7 billion, mostly concentrated in the real estate and the oil sectors. The trade exchange between Iraq and Saudi Arabia hit SAR23 billion over the past 10 years, a figure that is expected to increase on the back of the development recorded on the movement of trade and investment for the time being and which is anticipated to continue in the near future.

Al Mazaya report cited statistics showing that the real estate market in Iraq has been facing a major housing crisis for several years, coupled with a considerable large population growth, which exceeded 38 million people. In the meantime, the real estate market experienced further rises in the real estate price index in major cities, primarily Baghdad, which led to a decrease in the percentage of homeownership by Iraqi citizens. In addition, there is a growing urgent need for water, sanitary drainage and infrastructure projects, particularly for the power generation and the education sectors, including the establishment of bridges and roads across the country. The total value of reconstruction projects needed is estimated at about $88 billion. Hundreds of such projects have already begun and completed, while others are waiting for the funds pledged by international donors, and which are estimated at $30 billion to support 200 restoration projects.

The Al Mazaya report noted that the investment stimulus packages being provided by the government in Iraq are aimed at rebuilding a debt-free economy capable of performing without resorting to loans from overseas and avoiding as much as possible additional financial burdens during the period of reconstruction in particular.

Real estate development is one of the most active sectors in the region and one of the most lucrative investment platforms  across the world in spite of the recession recorded over the recent period. A large number of developers across the region have now diverse real estate portfolios, including land, housing, commercial and hospitality developments as well as entertainment and integrated, mixed-use communities. Such firms have the ability to replicate their successful experience on the Iraqi real estate market at any time, affirms Mazaya report.

Al Mazaya report concluded by saying that investment and urban conditions are ripe now than ever before, with property markets fully geared for successful, medium and long-term real estate investments.