[Real Estate Market in Dubai, UAE]

by

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

Abstract

The aim of the research is to find out the risk and return relationship in the real estate markets of Dubai and to assess the risk linked to the securities of real estate market in Dubai. For this purpose four indecies have been used which are from 1986 to 2003.The main part of the analysis is to find the index which best distinguish between systematic and specific factors affecting the real estate index. It has been founded that the high and irregular specific levels of risk in the division for the period of the last 15 years have created some form of "risk cycle". In the case of market recession, it has determined that public property are more exposed than the private market because of its high liquidity. This is defined as a serious risk to its long-term sustainability.

Purpose

Assessment of risk and return relationship in public real estate market in Dubai is vital for investors. In particular, the risk of the sector is estimated, which is becoming increasingly important in connection with the expansion of index linked investments. The purpose of this study is to assess the risk associated with the public securities of real estate.

Design / methodology / approach

To retrieve a specific / systematic risk from Dubai FTSE Real Estate Index (FTSERLT), a single index model (SIM) runs over the period 1986-2003. Four benchmark indices used for this purpose in accordance with previous studies. The main part of the analysis to find the index which best distinguish between systematic and specific factors affecting the real estate index. Monthly data collection and grouped into one-, three-and five-year periods to short-and long-term trend is better observed and identified.

Findings

The results show that the relationship between FTSERLT and all four of the index declining for the observed period. In addition, it has been noted that the high and irregular specific levels of risk in the sector for the period of the last 15 years have created some form of "risk cycle". In the case of market downturn, it has determined that public property are more vulnerable than the private market because of its high liquidity. This is defined as a serious threat to its long-term sustainability.

Originality / value

Unique breakdown of the specific and systematic risks was given on the basis of three different periods of duration and four benchmark indices. Particular attention was paid to periods characterized by more specific element of risk. The paper supports the existence of a "total real estate element of risk" between the public and private markets ...