Middle East market ready for shared ownership
Summit addresses whole ownership and rental exchange plans
The predictions for shared ownership in emerging markets such as the Middle East and North Africa (MENA) are predominantly positive, a summit concluded.
Speaking at the Arabian Hotel Investment Conference Shared Ownership Summit, RCI Middle East and North Africa managing director Jeff Tisdall said that the shared ownership model had good potential in the region.
“If the history of more mature markets repeats itself in Dubai — what we are going to find is that in markets like Abu Dhabi, Dubai, the north coast of Egypt — we are in the very early stages of a phenomenally attractive growth curve.
“We are also seeing a true formula for success in emerging markets and it really is taking the lessons and successful models from mature markets, coupling those with regional development expertise and then combining local consumer insights,” Tisdall said.
However, the MENA region would not be without challenges in the shared ownership market, warned Northcourse managing director Claude Attala.
“The weaknesses in the MENA region are basically that there is no natural demand [for shared ownership]; we have to try and stimulate demand, we have to organise well to be able to do it. One of the greatest challenges in the region has been the question of skilled labour and finding the right kind of personnel, especially on the sales and marketing side,” Attala maintained.
Attala also pointed to the need to consider other negative factors such as the low market entry price for real estate in the region, which could erode purchase rationale.
If the shared ownership market is to develop in the region, Tisdall indicated a number of emerging trends which should be capitalised upon to enhance the potential of shared ownership developments.
The trends in the shared ownership market include whole ownership within a mixed-use development and the rental and exchange programme discussed by RCI, both of which Tisdall felt were important aspects of the mixed-use market.
“We’ve seen mixed use developments that have been heavily powered by whole ownership. Now whole ownership has been incredibly important to mixed-use developments, not only in MENA but around the world over the last 10 years,” he added.
In addition to this, Tisdall felt that the RCI rental and exchange programme would address a gap in the market, and enhance the value proposition of end users.
“Our rental exchange product aims to bolster the value proposition of developers of second homes in two ways — firstly it expands the personal use options of end users by enabling them to exchange a portion of their resort home to travel around the world. The second thing it does is to provide them with rental income when they’re not using their home. If you take a step back and look at it, this is the basis of competitive advantage,” Tisdall said.