Abu Dhabi, Dubai, Cairo and Casablanca are best positioned within the Mena region to create the competitive conditions required to attract more long-term capital into their real estate markets over the next few years, said an industry expert.

Long term investors have been deterred from investing in the Mena region by the short term speculative mentality of both investors and developers over the last few years, pointed out Jones Lang LaSalle in its latest study.

As a result, few sales have occurred, despite the continued interest of such investors, it noted.

JLL in its latest study has identified a number of factors that determines the attractiveness of any particular market to the new breed of long term investors that the region needs to attract.

These factors can be combined together under three main headings:Investment environment competitiveness; real estate market conditions and availability of investable product, it stated.

In mature economies, long term investors (including private family groups, conglomerates, government entities, and institutional investors e.g. insurance companies, pension funds and listed real estate funds) account for around 80 per cent of large real estate investment transactions.

The criteria that these long term investors typically consider when assessing any potential real estate transaction range from the macro to the micro level, from market wide to asset specific considerations.

These include competitiveness of the investment environment; real estate market conditions and availability of investable product, it said.

The ability of different markets to attract long term regional and global investors will be of critical importance to their progression into the stabilisation and recovery phases of their cycle as the emphasis shifts from a short term to a longer term investment paradigm.

Citing Dubai, the JLL said despite being the region’s hardest hit real estate market, it has improved in relation to these factors over the past 12 months.

While definite progress has been made, creating the right environment to promote the recovery of the real estate market (and thereby attract more long term investment) clearly remains a ‘work in progress’.

"However, Dubai has made considerable progress since last year. There are no longer any red lights, with the market being characterised by a mix of amber and the emergence of a few green lights, suggesting progress has been made on all the factors and some have now seen recovery achieved."

As would be expected, ‘leading indicators’ such as equity markets and energy prices have recovered first, with other indicators (e.g. employment and occupier demand) lagging behind, the JLL report added.-TradeArabia News Service