Real estate companies with highly regulated and transparent corporate governance policies can take a leading edge over competitors on the capital markets, attracting a premium on shares of up to 40 percent from investors, an industry expert said Monday at the end of the two-day Middle East Real Estate Summit at Abu Dhabi National Exhibition Centre. Dr. Abdullah Alabdulgader, Founding Executive Director of the GCC Board Director's Institute, said in the wake of the global financial crisis, real estate companies in the GCC looking to attract investment must increase transparency and public disclosure, as well as place more emphasis on the rights of employees, creditors, and other stakeholders. "The financial crisis that hit the markets a few years ago has made clear the growing significance of good corporate governance in capital markets as it plays a key role in achieving strong and sustainable growth," he noted. "Good corporate governance has to be perceived as a big opportunity for the real estate sector to improve its public image and to become better managed. It can be a source of competitive advantage, and therefore play an important role with investors, lenders, and developers." Moreover, he said "investors in the real estate sector are looking for transparency, that goes beyond financial reporting and includes executive compensation, board member's qualification. Numbers also show that investors are willing to pay a premium on shares of up to 40 percent for companies with highly regulated corporate governance strategies." According to the Dubai Land Department, GCC residents invested $3.26 billion in the emirate's real estate sector last year, while transactions increased by 20 percent from 2010, to a value of $38.9 billion. Alabdulgader said investor confidence in the region has improved, but also highlighted the importance of the government regulatory framework. "Increased investor confidence is not only reflective of a company's good corporate governance practices, but also the factors of the regulations' framework, which is a prerequisite for the development of sustainable capital markets," he added. "There has been a great improvement in corporate governance in the GCC region in the last few years. I believe that corporate governance in the region is now in its second stage of development. Following the CG codes initial adoption in 2005 we are witnessing greater acceptance of these codes even among non
