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Middle East developers concerned over global finance crisis

Cautious developers in the Middle East predict a slowing of international expansion plans but they are optimistic that the downturn will not have a catastrophic effect on the domestic markets.

The UAE's number two developer, Abu Dhabi-based Sorouh Real Estate, said, however, that they are now adopting a wait and see approach.

'The health of the financial markets worldwide is linked to the UAE and we are hoping this would be over soon. Definitely this could have an impact and before we invest in some projects outside the UAE, we must consider all these factors,' said Chief Executive Mounir Haider.

'Due to the current crisis, each project will be driven by supply-demand rules and right now I cannot say whether we will put them on hold. We will wait and see.'

If mortgage rates and liquidity from mortgage lenders in Dubai are affected this would have a direct impact in slowing real estate sales according to Abid Junaid, Executive Director of ETA Star Properties.

'The developer margins are not high in today's market so we don't see a question of lowering prices,' he said. 'As a developer, we will look at taking different measures as and when the realty market unravels and progresses,' he added.

Tamweel, which has seen its shares tumble, also believes sales will slow but it is optimistic about the property market. 'These are trying times and challenging for everybody. The impact that we see comes from the current domestic growth. The tightening of liquidity that we see internationally is not as much here,' said Wasim Saifi, Chief Executive of Tamweel.

'The property market will do well. We might see a slowing down of sales but it is that time of the year when there is less activity. However, Cityscape will pump up the sentiment in the property market,' he added.

The major developers are all planning to launch new projects at Cityscape and do not envisage putting Middle East developments on hold.

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