Regional uncertainty driving greater focus on real estate valuation and due diligence
Ongoing geopolitical tensions across the Middle East are influencing how investors, lenders and advisors assess real estate risk across the UAE, says Rus Kolinko, Managing Partner at Archers.
While real estate activity across Dubai and Abu Dhabi remains relatively resilient, Kolinko notes that conversations around risk, liquidity and downside protection have become more prominent, particularly within larger or more complex transactions.
“What we are seeing is not a withdrawal of capital from the UAE market. If anything, the UAE continues to attract capital during periods of regional uncertainty,” said Kolinko.
“However, the approach to risk has become more disciplined. Lenders are asking harder questions. Investors are spending more time assessing downside scenarios, while legal and restructuring advisors are becoming involved earlier in transactions,” he added.
As investors and lenders become more selective around asset quality, income durability, refinancing exposure and execution risks, they are turning to methods to curb these risks. In the pre-deal phase, this development is lifting demand for independent valuation and technical due diligence advice.
“This is especially true in refinancing, restructuring, institutional acquisitions and transactions involving complex ownership structures. The trend is also evident in selected M&A transactions, portfolio disposals and sale-and-leaseback structures, where independent analysis can support pricing, financing and risk assessment decisions,” Kolinko explained.
Uncertainty compounds the case
The expert from Archers, a RICS-regulated real estate and corporate valuation firm operating across the UAE and the Gulf, added that valuation uncertainty can become more pronounced when market conditions shift quickly but transactional evidence has not yet fully adjusted.
“Pricing expectations, financing and construction costs, yield requirements and investor sentiment can move faster than completed transactions, increasing the importance of careful analysis, professional judgement and independent advice.”
In other words, in more complex transactions, the discussion is often no longer simply about value, but about understanding the assumptions, risks and technical considerations that sit behind it. “That naturally increases the importance of independent analysis, particularly for lenders, restructuring professionals and institutional investors who require robust and defensible analysis,” Kolinko said.
