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
 Sep 20 2014 - Sputtering City bid to keep high-flying Chelsea in checkArab Times
(MENAFN - Arab Times)  LONDON Sept 19 (AFP): Stung by a last-minute defeat in the Champions League Manchester City will attempt to make up ground in the Premier League title race when they host ...

 Sep 20 2014 - Everton return in style Spurs heldArab Times
(MENAFN - Arab Times)  PARIS Sept 19 (AFP): Everton marked their first appearance in Europe since the 2009/2010 season with a 4-1 Europa League win over Wolfsburg while Celtic and Tottenham were ...

 Sep 20 2014 - OCA encouraging Saudi on women athletes: Sheikh AhmadArab Times
(MENAFN - Arab Times)  INCHEON South Korea Sept 19 (AFP): Pop star Psy kicked off the Asian Games 'Gangnam Style' in an energetic K-Pop-fuelled ceremony Friday as North Korean athletes received ...

 Sep 20 2014 - Neeson in action in 'Tombstones'Arab Times
(MENAFN - Arab Times)  LOS ANGELES Sept 19 (Agencies): It's not for nothing that the names of Sam Spade and Philip Marlowe are reverentially referenced in writer-director Scott Frank's ...

 Sep 20 2014 - Indicators of US economy edge '0.2 percent' higher in AugustArab Times
(MENAFN - Arab Times)  WASHINGTON Sept 19 (Agencies): A gauge designed to predict the economy's future health rose in August but at a much slower pace than in July. The Conference Board said ...

 Sep 20 2014 - Omniyat to launch 3 projects worth USD952.7m in DubaiMENAFN
(MENAFN) Omniyat, a leading development group in the Middle East, is set to launch three distinguished mega-projects worth USD952.70 million at Cityscape Global, Khaleej Times reported.The group's ...

 Sep 20 2014 - Egypt awards oil, gas exploration deals worth USD187mMENAFN
(MENAFN) The Egyptian Petroleum Minister said his country has signed oil and gas exploration deals worth USD187 million with some Western companies and a Tunisian firm, Arab News reported.The ...

 Sep 20 2014 - Morocco, Congo discuss maritime transport cooperationMENAFN
(MENAFN) Local media reported that Morocco and Congo are currently holding talks to boost the bilateral relations in the field of maritime transport, QNA reported.In a meeting that joined the ...

 Sep 20 2014 - Denmark tightens asylum laws citing Syrian influxArab News
(MENAFN - Arab News) COPENHAGEN: Denmark said on Friday it would introduce a new temporary type of residence permit for asylum seekers fleeing civil wars such as the Syrian conflict after a huge ...

 Sep 20 2014 - Abbott cites 'chatter' of attacks on govt ParliamentArab News
(MENAFN - Arab News) SYDNEY: Intelligence 'chatter' has revealed that militants plan to attack Australian politicians and government buildings the prime minister said on Friday a day after hundreds ...

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