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Friday, 10 October 2008

Credit crunch challenging but not impossible, says Noor Islamic Bank executive

Dubai, Oct. 9th, 2008 (WAM) - Despite the recent global financial turmoil caused by credit crunch, investor confidence remains guardedly positive, announced Noor Islamic Bank.
The comments were made by Eric Stoclet, Group Executive Director of Noor Islamic BankNoor Islamic Bank, during a panel discussion titled "Where has all the liquidity gone" at the International Real Estate Investment and Development Conference held on the penultimate day of Cityscape Dubai 2008, one of the largest real estate sector events worldwide. According to Stoclet, the UAE has developed rapidly with tourism and financial services remaining its key focus. It is estimated that the financing requirements for these projects will be around AED50 billion for 2009.

He said: "Raising this financing has become more challenging as loan to value ratios rise higher and equity takes a bigger piece of the puzzle. As a result of the changing nature of the credit markets, a number of projects will not meet investors' return criteria and may not attract enough financing." Pointing out that no market can stay immune from the crisis currently embroiling the world, Stocklet commented: "There is no cheap money out there anymore. In the medium term, development financing will be difficult, particularly for speculative projects. Securing property financing will also be more challenging than in the past and will remain conditioned on cash flow coverage, with much less importance given to loan to value ratios." Panelists at the Cityscape Dubai conference also examined the GCC real estate market, citing the launch of DIFC's Real Estate Fund as a positive step for reinforcing investor confidence. Stoclet added the GCC markets are at different phases of development, with high level occupancy across all product types. The International Real Estate Investment and Development Conference, Cityscape Dubai's main conference, brought together world-class speakers and leading regional industry experts for three days of dedicated discussions and analysis of macro-economic conditions of the real estate industry.
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