Arabs find affirmation in real assets in ways that Westerners gravitate toward financial assets. But that bias has created a massive property-development glut, with a sharp drop in portfolio-return expectations. One consultancy notes that the value of cancelled projects in the GCC vastly exceeds completed projects. There is no equilibrium in sight. As a result, we expect to see an ever-widening stream of Arab money making its way into real estate elsewhere. Those moves will be undertaken without fanfare to avoid friction with GCC officials. The twist is that investors will reach deeper into emerging markets to meet historical yield expectations, than they would prefer. ■
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