DUBAI: Unrest in the Middle East and North Africa region will lead to delays and cancellations of many real estate projects and may dampen the outlook of regional property markets, a Standard & Poor's report said. The ratings agency said political transition or potential regime changes would result in a mounting of property title disputes and business interruptions. "Popular unrest and political upheaval in the Arabic-speaking Middle East and North Africa countries is putting a damper on regional property markets," said credit analyst Tommy Trask. "Many real estate projects, planned or in progress, in areas directly affected are subject to delays and cancellations." Hardest hit were the leisure and high-end residential segments, it said in a report on the Middle East and North Africa (MENA) real estate markets. Some real estate companies were obligated to address damages to buildings from looting and demonstrations. "In our view, property investors will likely be wary of uncertainties linked to political transition or potential regime changes." "We do not expect restarts in large scale property developments in areas hit by the unrest until the political landscape stabilizes," the report said. S&P said the negative impact on the real estate sector in Arab MENA countries would be more acute in states already undergoing political transition, such as Tunisia and Egypt, as well as those currently experiencing civil unrest, namely Libya, Bahrain, Yemen and Syria. The impact of the unrest will also be seen on other more politically stable regional countries with interests in the unrest-hit nations. Emaar Properties, UAE's largest developer by market value, may be most affected with four developments in Egypt. "For now, Emaar's assets in Dubai are performing well and helping to offset what we see as potential obstacles to its international development," the report said. Strikes and transportation disruptions associated with the unrest may adversely affect local economies. At the same time, potentially higher cost of debt and increased government spending measures may weaken some governments' finances. The agency does not rate Yemen and Syria, and has suspended its rating for Libya.
