Problematic Dubai Real Estate Market Attracts Berkshire Hathaway Attention
The Warren Buffett-owned Berkshire Hathaway saw something in Dubai's problem-plagued property market. According to Bloomberg, the real estate brokerage sees potential in bringing wealthy investors to look at and invest in different properties in the Middle East. Despite Dubai's flailing real estate market, the brokerage sees something positive in it.
Real estate prices have been rising and falling in general all around the world. In Dubai, however, it had been falling despite a recent peak in 2014. Investors who were looking or assets turned to the troubled property market, however, with high-net investors seeing a positive despite the declines happening over the years.
Berkshire Hathaway had its own share of successes in recent times. The real estate deals it had handled in the US ended with success. The announcement of its interest in the Dubai property market coincided with the opening of its Dubai office. The brokerage had expanded into the city just in time to observe the property market.
The Buffet-owned company is in the news for another bit of drama, one that has it backing Houston's Occidental against Chevron over rights to Anadarko Petroleum. Chevron initially offered $33 billion to Anadarko, but Occidental--with Warren Buffet's help--hit back with a $38 billion bid at $76 per share. Chevron's $33 billion bid came with a $65 per share guarantee.
Chron reported the specifics of the Anadarko deal, revealing that it has also given a 25% cash, 75 percent stock guarantee. Anadarko has been reviewing Occidental's offer after initially spurning the company when Chevron came up with the larger deal. It has since ruled that Occidental's deal was potentially superior.
Occidental managed to steer the deal in their favor when its executives flew to Omaha, Nebraska over the weekend to discuss with Berkshire Hathaway's own executives. The infusion of cash was expected to ease the concerns of Occidental investors, particularly those thinking it might have over-extended itself in the deal with Anadarko.
The expansion into the Middle East is part of a plan where Berkshire Hathaway's HomeServices branch will link up with different buyers and sellers in prime locations around the world. The Arabian country is just the start; the company is looking to establish roots in major countries like the UK, Japan, and Italy, and is already talking to prospective partners in Paris, France and Madrid, Spain. Rounding out the list of its prospective client countries is Hong Kong, Mexico City, and Tokyo.