Dear Alfa International Holding Corp. shareholder,
In our continuing pro-active efforts to keep investors apprised of the most relevant and timely information on Alfa and its target markets, AGORACOM is pleased to present you with this latest Industry Report.
Alfa International Holdings Corp. conducts all its real-estate development business activities through its wholly owned subsidiary, Journey of Light, Inc. (JOL)
A Memorandum of Understanding (“MOU”) between JOL and the Sultanate of Oman was announced August 01, 2005 for the construction of a tourism and residential real-estate development project with a presently projected construction cost of approximately U.S. $1.2 billion.
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Please find below an article which outlines the continueing expansion and diversification of economic activities in the Persian Gulf Region..
Regards,
AGORACOM Investor Relations
To read the entire article, please use the following link:
http://emagazine.credit-suisse.com/app/article/index.cfm?fuseaction=OpenArticle&aoid=126963&coid=128&lang=EN
Middle East: Not merely an oil story
Anja Hochberg
Fixed Income & Forex Research
In the wake of the oil-price hikes of the 1970s, Middle East nations tended to consume their new-found wealth, rather than investing the revenues. This time, though, is different. The Middle East success story is based on a broader set of economic and political factors, and not just on oil. Capital inflows as well as deregulation and liberalization efforts have provided the basis for remarkable economic growth in the last four years.
The envisaged diversification away from oil to other sectors, such as financial, tourism, construction and construction-linked industries (e. g., telecommunications, information technology, energy, water and electricity) should contribute significantly to future economic growth in the region, amid a generally healthy economic background. This should boost potential growth in the area, which is expected to reach 5% 7%. In addition, the diversification from oil to natural gas enhances these investment opportunities. The Middle East holds up to 40% of global natural gas reserves, but currently contributes only 5% to the global gas trade. Gas trading volume, however, is expected to triple in the next 25 years. This requires investments that amount to approximately USD 100 billion per year for the entire region.
Real estate
The experience from other emerging markets suggests that real estate is one of the first sectors that reacts to improvements in economic conditions. So far, investors have focused on Dubai`s real estate sector. The real estate development projects ``The Palm Jebel Ali`` ``The Palm Jumeirah`` and ``The World`` have been the subject of big headlines recently. Similar promising real estate projects can be found in Dubai`s office and retail property sector, where the most prominent ones are the Burj Dubai tower and the Dubai Mall, which claim to become the highest tower and largest shopping center on earth, respectively. Nevertheless, the abundant project pipeline should not dampen the price potential very much since the market is experiencing strong, even excess, foreign demand coupled with a robust pick-up in domestic demand and delays in construction. Since 2002, this has led to significant upward pressure on both sale prices and rents (estimated at cumulative 50% 150%). One major demand driver is a change in Dubai`s property regulation in 2002, which made it possible for non-UAE citizens to purchase or rent real estate. While excess demand currently determines the trend on Dubai`s real estate markets, the strong construction activity raises concerns of future oversupply. We view these concerns as somewhat exaggerated because Dubai`s population is expected to double by 2012, from today`s roughly 1 million. Apart from the direct investment in the form of purchases, investors have the possibility to gain exposure to real estate through acquisition of stakes in development projects. The possibilities include private equity investment and investment in shares of publicly listed real estate developers such as Emaar Properties a Dubai based real estate developer. Other states are trying to imitate Dubai`s success story: In Qatar, the ``Pearl-Qatar,`` the first and largest international real estate development project in the country, is on the drawing board. Opportunities could also arise in Abu Dhabi, which has recently passed a law allowing non-UAE nationals to buy and sell property. If liberalization of the real estate market in Abu Dhabi continues and the market is opened up for non-UAE citizens, the Abu Dhabi residential market could harbor high growth potential as well.
