Turning the Middle East and Africa into a Goldmine:
Attracting Investors to Infrastructure and Property Developments in the Region

Implementing innovative initiatives to win financial support in the Middle East and Africa remains a challenge for many countries in the region. Mohammed Merza, the Chairman at the marcus evans Infrastructure & Property Development MEA Summit 2010, addresses the challenges troubling public authorities, infrastructure and property developers and their solutions. Interview with: Mohammed Merza, Chief Executive Officer, Municipal One Stop Shop, Ministry of Municipality and Agriculture Affairs, Bahrain

FOR IMMEDIATE RELEASE

Record growth and development in some countries in the Middle East and Africa, booming property markets and mammoth infrastructure and property projects on an epic scale, are transforming this region into a goldmine for investors. But not all that glitters is gold. Mohammed Merza, Chief Executive Officer, Municipal One Stop Shop, Ministry of Municipality and Agriculture Affairs in Bahrain, the Chairman of the marcus evans Infrastructure & Property Development MEA Summit 2010 shares his thoughts on how to attract more investors into the region and create an environment that ensures success in infrastructure and property development projects.

What initiatives do you think would attract more investment into infrastructure and property projects in the Middle East and Africa?

Mohammed Merza: Investors are now facing an obstacle, which is the liquidity of the cash flow and banks are so conservative with their financing. The governments should take the initiative to resolve this issue by getting more liquidity from the banking sector, and by also facilitating public and private funding. Governments should also provide tax relief to foreign investors. In addition, there should be a reform of property and business ownership laws, and regulations related to the issuance of permits should get easier.

How can public authorities help attract more investment and development?

Mohammed Merza: I believe that government policies should be more liberal in some countries, and a more transparent and accountable environment for investors should be provided. In Bahrain, the public authorities and the Municipal One Stop Shop took several steps in order to facilitate and attract more investors to start their projects around the Kingdom; we have started the E-permit system, where investors can apply for their building permits online through their consultant office, and they can keep track of the application progress through the electronic system.

In addition, Governments should assess themselves before they invite investors; to be attractive, they should be offering a full spectrum of infrastructure services. In Bahrain, our Master Plan shows land plots which can be developed and the type of use (zoning), commercial, industry or housing, up to the year 2030. This will enable real estate developers to plan any future projects, as they’ll know when the various utilities will run on each plot.

How can public and private sectors within the infrastructure and property community better collaborate?

Mohammed Merza: Public authorities should allow private investments into public projects that benefit the private sector, and public and government investment in basic private infrastructure projects should be encouraged. 

What are the real estate opportunities in the Middle East and Africa at the moment? What investment strategies would you recommend?

Mohammed Merza: Following the financial crisis, the real estate market changed in terms of its strategic thinking about the investors. Earlier, investors were looking for short-term investments, but now the crisis has created opportunities for middle to long-term investors. And this development will reflect on the whole economy; it’s not one sided. We are still encouraging investors to go for the mega projects where the fundamentals are sound.

The crisis had also made investors do better due diligence and selection criteria. More firms are assigned now to prepare feasibility studies, like traffic impact studies, and other technical and financial reports; this is one of the benefits we gained from this crisis. Projects are fully supported with studies, and you can look at a project and be confident that it will be a successful one. Investors and real estate companies are modifying their strategies now. Investors were going after housing projects, but I don’t believe this is the time for that anymore. Many investors are changing their portfolios, going to the industrial sector and logistical services which support industries.

What industry developments can we expect in 2010?

Mohammed Merza: Oil prices will rise above current levels as the world economy continues to recover, thus spurring the GCC oil producing country economies, therefore, any projects supporting the oil industry in oil producing GCC countries will flourish. For example desalination water plants (as you need it for oil extracting), exploration equipment, gas or nuclear powered electricity.

In terms of building permits issuance, I think for the first half of 2010, the number of permits issued will fall compared to the first half of 2009, as the market changes its strategies, but the number of applications we will receive for property development projects will be higher than 2008 and 2009 as the market recovers.

Contact:
Sarin Kouyoumdjian-Gurunlian
Press Manager
marcus evans, Summits Division
Tel: + 357 22 849 313
Email: press@marcusevanscy.com