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Moody’s: Negative outlook in GCC property for coming12-18 months
Moody’s says supply-demand imbalances persist in the sector.
May 24, 2010 9:50 by Katherine Azmeh
Moody’s Investors Service says the GCC property industry will retain a negative outlook for the next 12-18 months, citing supply-demand imbalance in commercial and residential sectors as the main driver of downward pressure in the sector, Zawya.com reported Monday.
The report, “Industry Outlook: Arabian Gulf Property,” said that other factors impacting the property sector will remain rather unchanged for the remainder of the year, including “funding and the preservation of cash, which includes potential disposals of non-core assets, cash collection and debt standstill agreements.”
Additionally, Moody’s said it has downgraded the ratings of all GCC issuers with real estate exposure over the past 12 months, and that the outlook for the region as a whole is negative, with Saudi Arabia’s property market the “brightest spot of the six GCC countries.”
“The large, growing and young population of this Kingdom continues to support the local residential market,” Zawya reported, quoting Martin Kohlhase, Moody’s analyst and author of the report. “Furthermore, rent and sale prices have remained stable in prime areas, while limited price correction has been witnessed on the outskirts,” added Kohlhase.