Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

ME investors to spend $180bn in real estate over next decade  Join our daily free Newsletter

MENAFN - Arab News - 17/06/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab News) Middle eastern investors are expected to spend 180 billion in commercial real estate markets outside of their own region over the next decade according to the latest research from global property adviser cbre.

the major increase in flows of middle eastern capital into global markets is emerging from the extraordinary mismatch between the lack of institutional real estate in domestic markets and the huge spending power concentrated in the region.

europe is the preferred target with 80 percent of the 180 billion (around 145 billion) targeted for the region over the next 10 years. close to 85 billion will flow into the uk with 60 billion directed at continental europe. france germany italy and spain are among the key target markets.

global real estate markets have seen significant inflow of middle eastern capital with 45 billion invested between 2007 and the end of 2013-seven times the reported activity in its home market.

with 20 billion invested outside their home region in commercial property in the last two years alone-there is strong evidence that middle eastern players are increasing their interest and investment allocations to direct real estate.

middle east sovereign wealth funds (swfs) are now among the world's largest and most influential sources of capital accounting for 35 percent of swfs assets under management (aum) globally.

when compared to western and asian swfs these funds currently allocate the smallest share (9 percent of total portfolio) to alternative assets. a further increase in allocation by middle east swfs even by a small fraction represents an extremely large amount of capital that would have a significant impact on the global commercial real estate market.

the average target allocation to real estate by global swfs is 7.9 percent. applying this to the 2.2 trillion in aum held by middle eastern swfs gives a total close to 175 billion.

cbre has explored a range of scenarios including faster and slower growth of aum by swfs; a conservative estimate puts investment in global real estate by middle eastern swfs at 130-140 billion over the next decade.

taking this figure with the expected spending of private middle eastern investors as well as property companies and developers equates to around 180 billion that will flow cross-border and into global markets over the next ten years.

nick maclean md cbre middle east commented: "the 'buy and hold' strategy adopted by many middle eastern investors within their home region and the resultant lack of deal flow opportunities leaves much unsatisfied demand here. coupled with increased confidence in global markets and the need for diversification overseas investment has grown strongly. this trend is set to continue and with new sources of middle eastern capital particularly from saudi arabia set to enter the market over the next couple of years the demand for real estate is increasing strongly. since the global financial crisis swfs from the middle east have become one of the most significant sources of capital in the global real estate landscape. the demand from these institutions has evolved during the last few years into a sophisticated source of liquidity for many of the mature real estate markets around the world."

close to 90 percent of all middle eastern commercial real estate investment outside of the home region in 2013 was in europe. this is in sharp contrast to asian capital that has become increasingly diverse geographically in the last 18 months. while there will be an increase in allocations toward the americas and asia pacific regions the majority (80 percent) of direct middle eastern investment will target europe as it offers diversification cultural acceptance high liquidity and market transparency.

around 85 billion of the total allocation will be invested in the uk with continental europe expected to receive 60 billion-almost five times the level of direct investment by middle eastern investors in the previous decade. germany and italy are key targets with spain particularly the hotel sector now a strategic destination. france has developed close ties with middle eastern investors in recent years and offers a vast choice of trophy assets so will continue to attract strong demand for core product and sectors.

jonathan hull md emea capital markets cbre stated: 'the vast majority of middle eastern investors are long-term players looking for wealth preservation and strong high income-producing assets rather than opportunistic investors playing the cycle for short-term gains. this strategy favors prime buildings in core markets and often very large lot sizes. offices feature heavily in their acquisitions while in the last couple of years there has been greater interest shown in retail as illustrated by a string of high street acquisitions in london and paris as well as provincial cities in the uk and france. interest in hotels is also noticeable and extends from a historic interest in the hospitality sector in home markets."

iryna pylypchuk emea research and consulting cbre said: 'culture openness and favorable taxation laws are significant push factors for middle eastern buyers toward europe and the uk in particular. close historical political and economic relations as well as britain's recent decision to become the first non-muslim nation to issue shariah-compliant islamic bonds confirm europe as the favored destination for middle eastern capital."

while some increase in interest toward the americas is expected the need for middle east investors to diversify away from dollar-dominated investments will counteract the fundamental attractiveness of real estate as an asset choice. cbre estimates that about 10 percent of the capital (around 18 billion) will flow into the region. this represents an average annual investment of around 1.8 billion notably above the 1.2 billion invested in 2013 which in itself was relatively high by recent standards.

the diversification benefits that the asia pacific region offers could lead to a change in strategy for middle eastern investors. the number of deals completed in the region has been on the increase but how quickly that interest will crystalize into a more robust pace of acquisitions rather than a small number of large asset deals remains to be seen. cbre expects that the remaining 10 percent of the 180 billion will be intended for allocation towards asia pacific.


 


Arab News




  MENA News Headlines
 Oct 31 2014 - Gulf Air to launch new service to MoscowMENAFN
(MENAFN) Gulf Air, Bahrain's national carrier, announced launching its direct services to the Moscow, with the operation of four flights a week to Moscow that will be operated by an Airbus A320-ER ...

 Oct 31 2014 - Qatar's spending falls 6.6 percent in Q2MENAFN
(MENAFN) Qatar's government spending reached USD10.7 billion during the April-June period, a fall by 6.6 percent compared with the same period last year, while revenue soared to a record high during ...

 Oct 31 2014 - MC4-1 Rambowleros Zuhair Fayez 1 rule 10th KAMC Friendship GamesArab News
(MENAFN - Arab News) In keeping with tradition the Employee Social Club and Recreation Services of King Abdulaziz Medical City-Jeddah Western Region held its 10th KAMC Friendship Bowling Games at ...

 Oct 31 2014 - Saudi- Guardians overcome Absar host team Maskan Arabia bounces backArab News
(MENAFN - Arab News) RIYADH: JOEY JULATON SALEMPowerhouse Guardians (Diablo) got the better of equally talented Absar team 108-104 in a high-scoring game during the second week of action in the 2nd ...

 Oct 31 2014 - Saudi- Majid rolls perfect 300 Gilas back-to-back Team of Week in FTBJ-ICBL eventArab News
(MENAFN - Arab News) For the second time in three weeks in leagues organized by Filipino Tenpin Bowlers of Jeddah perfect 300 game found a new owner in Majid Aslani.Following the lead of Randy Mata ...

 Oct 31 2014 - Saudi- Al Faisaliah captures Inter-Hotels crownArab News
(MENAFN - Arab News) Al Faisaliah coached by Francis Balanquit finished off Sheraton Riyadh Hotel & Towrs by winning Game 3 of the best-of-three championship series 75-72 in a pulsating contest ...

 Oct 31 2014 - Saudi- Lahore Lions win thriller against KFSHArab News
(MENAFN - Arab News) RIYADH: Lahore Lions scored a thrilling six-wicket win over King Faisal Specialist Hospital in a seventh round match of the American Express Twenty20 cricket tournament organized ...

 Oct 31 2014 - Saudi- Desert Warriors goes down fighting to ARM Afroz slams ton for TamerArab News
(MENAFN - Arab News) JEDDAH: Desert Warriors went down fighting to ARM by six runs in the Ace Travel Premier League division morning session week-seven match organized by the Jeddah Cricket ...

 Oct 31 2014 - Amman accuses Israel of 'state terrorism' in JerusalemArab News
(MENAFN - Arab News) AMMAN: Jordan on Thursday accused Israel of 'state terrorism' after it closed Jerusalem's flashpoint Al-Aqsa mosque compound the third holiest site in Islam.Israel said its ...

 Oct 31 2014 - Saudi- Most erring doctors have master's Ph.D. degreesArab News
(MENAFN - Arab News) A whopping 70 percent of medical practitioners who have committed medical errors over the last five years hold master's and doctoral degrees local media said quoting a report ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help