From development to management the challenge of the new built asset in the Middle East

Over the last decade, the Middle East real estate industry has gone through a huge boom followed by a precipitous dip. This paper focuses on the challenges faced and responses by middle-eastern real estate companies in strategically adapting to these changes. Externally the market conditions have changed drastically. As the market has moved from a demand exceeding supply condition to the reverse, several shifts have occurred: 1) from investor driven to end-user driven activity; 2) from speculative buying to purchasing completed property; 3) from an off-plan sales model to a long term model with secure cash flows; 4) from high-end housing and premium retail/commercial property to middle income/affordable housing and middle market retail/commercial property. The resulting internal shift in the emphasis within these organizations is from pure development to asset management. This involves a change in the way construction projects are being completed along with providing quality customer services. As a result, the need to shift the strategy and operating models, as well as the mind-set of these organizations has become apparent. This paper analyses how organizations are coping up with these challenges, highlights weaknesses in the current strategic actions, and proposes a more robust approach to overcome the challenges with a strong rationale and practical case studies to support the arguments.