As people live longer and require more care, and with retirement pots and pensions not delivering the kind of dividends that can assure an easy life, it is important to make the most of savings. Clever people are choosing to put their capital in investment portfolios and are wondering if emerging markets are the best place to make a start.
Now that the world has emerged from the financial crisis that started in 2008, many more markets are opening up. This is especially true in countries or regions that were previously thought of as being economic backwaters, a perception led by factors such as endemic poverty, corrupt governments, and lack of infrastructure. However, people are now having to change their perceptions.
In fact, such regions are becoming hotbeds of investment, particularly in terms of real estate. Investors such as Fahad Alrajaan of Al Ahli, Bahrain’s largest lender to people involved with commercial and private investment opportunities, have quickly spotted that areas such as the Middle East and Africa have huge development potential and acted to tap this market. This is in addition to their real estate interests in Kuwait and Qatar and the UK. Mr Al Rajaan has seen that Nigeria and Dubai, for example, are currently attracting huge wealth thanks to improvements in banking systems that have cleaned up the corrupt officials and opened the doors to foreign investment.
The key real estate opportunities lie in both the public and private spheres. Many regions lack the infrastructure to support growth on the desired scale, so real estate investors are putting their money and support into huge construction ventures that will provide the people with the amenities and facilities they require to become players on the global financial stage. This infrastructure building includes shopping malls, sporting venues, and office buildings. Meanwhile, there are opportunities at the other end of the spectrum, with high-end developments designed to appeal to the ultra-rich.
This makes emerging markets in the Middle East and Africa, particularly sub-Saharan Africa, great for those who want to create an investment portfolio. When a region begins to demonstrate a boom in economic prosperity, it naturally attracts people towards its center. However, a lack of residential housing and other facilities means that there is huge scope for real estate investors to step in.
In some of these regions, there are huge waiting lists for affordable housing, while the ultra-rich are demanding luxury residences with state-of-the-art technologies. The real estate market also creates a demand for new, eco-friendly products such as renewable energy, and the two go hand in hand. This means that anyone looking to invest in these emerging markets will be able to build up a diversified portfolio, not one that is solely focused on real estate.
Now is the best time to think about creating an investment portfolio, thanks to the huge opportunities offered by markets that were previously unconsidered and which, for this reason, have far more to offer at present than more traditional markets.