Keynote presentation from Donald Trump Jnr at Cityscape Dubai 2009

Mature markets now compete with emerging markets

Keynote presentation from Donald Trump Jnr at Cityscape Dubai 2009
predicts changing world order in real estate investment


Corrections in real estate prices specifically in the more mature western markets are attracting would-be investors at the expense of many emerging markets, according to Donald Trump Junior, Executive Vice President for the Trump Organisation, during his keynote address at the Cityscape Dubai 2009 conference.

Trump went on to explain that emerging markets were not only competing with each other for a finite amount of investment funds, but they were now competing with more mature markets.

“It’s a question of risk versus reward. The potential reward for investing in mature markets has improved significantly over the last couple of years, whereas the risk has if anything reduced. On the other hand, emerging markets, whilst they still represent good reward, their risk element – transparency, regulation – is still a concern. Therefore funds that would normally have been earmarked for emerging markets are now finding their way into the more mature real estate.”

As a clear example, Trump, who was due to speak in Egypt and India after the conference, said there was still clear potential for emerging markets, but the global fall in prices meant there was more opportunity to deals in its own back-yard. “I’ve just bought a new apartment in New York which was twice the price two years ago.”

While he stressed the values that characterised Dubai’s boom – the excess, drive and momentum – were not lost in a recession, he recognised the challenges of reconciling the increased supply that’s now coming onto the market.

“Its greatest asset was its greatest liability,” he said. “But in terms of opportunity, now is the time to be looking at real estate here. When things normalise, Dubai is going to be in a lot better position than a lot of other cities.”

Trump recalled his previous visit to Cityscape Dubai in 2006, at the height of the real estate boom. “Those years went by in the blink of an eye, but we all went over the top,” said the Executive Vice President, who started out as a dock attendant and landscaping on a minimum wage in the US. “People lost track of the concept of spending, and we have to get back to basics.”

The ‘herd mentality’ of investors and speculators ‘flipping’ properties before completion had created unrealistic expectations, where developers were disappointed if they didn’t sell out units in one day. “The days of relying on 100% foreign buyers turning up with briefcases of cash are over,” he said.

Dubai has been unjustly criticised in the international media, he added, although he conceded that the city and other GCC states need to do more to increase transparency – “and not just talk about it”.

Chris Speller, Group Director of Cityscape Dubai 2009, said: “It was a thought-provoking presentation from Trump and the perfect way to open the conference. The issues he addressed, such as realism and transparency, complement perfectly with the theme of the event this year.”

For full details of Cityscape Dubai 2009 and its events, please visit: www.cityscape.ae