Warren Buffett’s Berkshire Hathaway has recently announced that it would expand its brokerage operations into Middle Eastern markets by opening Berkshire Hathaway HomeServices Gulf Properties.
The new unit will be led by Chairman Ihsan Husein Al Marzouqi and Chief Executive Officer Phil Sheridan. The team will consist of 30 advisers and support staff, according to a company statement. “Gulf Properties aspires to grow quickly by tripling its advisor count and opening a second office in Abu Dhabi within a year,” it said.
“Dubai has been a top priority for our network’s global expansion as it represents innovation among world leaders and is a top global center for trade, logistics, tourism and finance,” said Berkshire Hathaway HomeServices Chairman Gino Blefari. “Gulf Properties will connect our growing brokerage network between East and West and will provide unrivaled access to one of the world’s most exciting real estate destinations.”
Berkshire Hathaway HomeServices partnered with London-based Kay & Co. last year, its second overseas franchise in Europe, after Rubina Real Estate in Berlin. The company expects to add Milan, Vienna, and Dubai to its international book. Berkshire Hathaway Specialty Insurance recently began operations in Dubai.
Warren Buffet is entering the Dubai property markets as prices have fallen 25% since the 2015 peak. Lower oil prices, weaker currencies in nearby countries (UAE’s currency is pegged to the USD), a global synchronized slowdown, and political turmoil in the Middle East have all contributed to the downward pressures on price.
S&P Global Ratings warned in February that Dubai home prices could drop by at least 10% this year due to a continued imbalance in the market, before bottoming out in the early 2020s. Dubai is one of the world’s biggest ongoing construction sites, with nearly 1,200 cranes active across the city, constructing an estimated 31,000 homes this year, far exceeding demand.
Decrease in property prices by more than a quarter from a peak in mid-2014 is hurting earnings of the emirate’s top developers and forcing construction and engineering firms to cut jobs and halt expansion plans. In 2009-2010, house prices in Dubai plunged more than 50 percent from their peak, forcing Dubai to seek a $20 billion bailout from oil-rich Abu Dhabi to escape a debt crisis.
Image: Dubai, United Arab Emirates / Aleksandar Pasaric
