Robert here, continuing yesterday’s post. I am sure you lost sleep in anticipation…

We believe that the level of participation at the recent Dubai conferences can be viewed as a barometer of market optimism. If the barometer is working, then there is some cause for hope. Over 70,000 people from 150 countries were in attendance at Cityscape Dubai 2008 last week and over 1500 participants from 150 countries showcased projects. This represented record participation by both local and international developers and is a substantial sign of confidence in the UAE’s economy and real-state market, notwithstanding the global financial crisis.

At present there are more than 250 major civil construction projects, worth $120 billion, in the Gulf region. Many of these are in the bidding stage. Only a day before Cityscape Dubai 2008 opened its doors, Nakheel announced it will build a new building in Dubai with world-record height as part of a $38 billion project. The building will reach about one kilometer in height and will be substantially taller than the current tallest building in the world, the Burj Dubai. The Burj Dubai is almost finished and is 40% taller than any other building in the world.

Bullish executives, as we know, can’t always be trusted, but listen to Peter Riddoch, CEO of DAMAC Properties Dubai: “We believe Dubai has the potential to become the most expensive commercial real estate destination in the world in the coming years. The demand and prices for office spaces is increasing; according to a recent report by Colliers International, Dubai is ranked third in terms of global office real estate construction activity, behind Moscow and Shanghai.” The office occupancy rate in Dubai has been reported to be over 98% in ’08.

Cityscape has helped to substantially lower fears in Dubai that the global crisis will cause the property boom to come to an end. People were so excited by Cityscape last week that they even extended the opening hours of the event by one hour each day “in order not to disappoint visitors.” The front page headline on the expo’s official paper: “No sign of a slowdown.” Many believe that the market situation in the US and Europe is going to scare money toward investment in the Gulf: “You are living in a region full of money. … And those people are ready to spend,” said one.

Most senior project finance partners we know at major law firms in Dubai are a bit more restrained in their optimism than those infected by the Cityscape atmosphere. For our purposes, of course, this is what counts. Regarding whether there will continue to be the same level of financing and investment available for a continuing building boom, my clear view coming off of numerous meetings was that most in Dubai expect a property market correction. This was the general feeling well before recent global financial crisis because of the run-up in values. Nevertheless, several are still in expansion mode. What are they doing? Well, I have been told that development companies are continuing to aggressively push and get financing for new world class and one of a kind projects; private equity firms are investing directly into the region, rather than just seeking to pull cash out; and there are incredibly large cash reserves in the region, which are more likely to be invested in the region than in the past, when sovereign wealth funds and other institutional investors turned heavily to the US and other foreign markets.

Overall, although it’s a bit of an island feeling, there continues to be a general positive buzz in the market in Dubai, among all kinds of business professionals. It is a cautious optimism, due to what is happening around the world, but there is a general feeling of optimism and continued excitement about the market from most people I run into. Young professionals in Dubai they feel very fortunate to be in the market at this time. Many of such persons had little knowledge of Dubai only a year or two ago and never had any plans to relocate to the Middle East.

For example, on a personal note, I ran into an old college friend, Rob, four weeks ago in Dubai, who works for an IT company in Gainesville, FL. He and his colleagues in Dubai had never been outside of the US, not even to Mexico or the Bahamas, and yet here his team was in Dubai and settling in for 6 months of work and potentially a permanent move. This small company from Gainesville, FL decided that they needed to be in the Dubai market too. They seem extremely excited about the prospects for their future in Dubai. My friend is a guy who married quickly and settled down just off campus from where we went to college at University of Florida. He is very happy with that lifestyle (I am quite jealous of his nice life near UF actually), but because of the opportunity just moved his operation to Dubai, in the middle of Gator football season no less. He and his colleague have a blog of their first time out of country and Dubai experience that you can check out if you have a lot of time on your hands at work these days: http://www.wavedubai.com/ (his blog also has a post about the mint incident at Burj Al Arab I described previously). Rob is no longer unusual in Dubai and if a move there works for you, you won’t be either.