(MENAFN- The Peninsula) Qatar was the largest source of Middle Eastern capital in 2014, with $4.9bn invested globally, according to CBRE's "Middle East In and Out 2015" report. While Saudi Arabia was the fastest growing source of outbound Middle Eastern investment with $2.3bn invested.
Middle Eastern buyers invested a total of $14.1bn outside their home region in 2014, making the Middle East the third largest source of cross-regional capital globally. Europe remains the preferred market for Middle Eastern investors, receiving $10.2bn in 2014. In line with other investor groups, the year saw a major shift in investment strategies, with activity growing across second-tier European locations, including Amsterdam, Frankfurt, Budapest and Madrid. While still the most popular market, London received 32 percent of spend in 2014 compared to 45 percent in 2013, with Paris and New York growing their shares in 2014 to 16 percent and 10 percent respectively. London and Paris were the only two markets to retain a top five ranking in 2014.
"There has been a fall in outbound capital from the region from $16.1bn invested globally in 2013 to $14.1bn last year. In part, this is a function of difficulty in accessing product, and the large lot sizes these buyers tend to invest in. However, looking ahead and in light of weaker oil pricing, real estate acquisitions by sovereign wealth funds are expected to slow further in 2015 and beyond," said Iryna Pylypchuk, Director, Global Capital Markets Research, CBRE.
Historically sovereign wealth funds have dominated Middle Eastern investor league tables -accounting for around 50 percent of international commercial real estate acquisitions in 2013. While still the largest single investor group, Middle Eastern high net worth individuals, the private sector and other collective vehicles played a more significant role in role in global markets 2014.
Nick Maclean, Managing Director, CBRE Middle East, said, "Middle East investors overseas real estate spending is increasing in importance, particularly amongst private and family offices and particularly from Saudi investors, as geographical diversification has become more important. We feel that this trend will accelerate over the next few years."
Pylypchuk added, "In contrast to SWFs, lower oil prices may have triggered private capital to increase international allocations and speed up deployment faster than would have been the case otherwise. Our research clearly shows a greater allocation of investment to real estate and desire to diversify away from the home region. This has had a significant impact on Europe, where the combined investments of private wealth and equity funds from the Middle East grew by 49 percent year-on-year to $5.5bn."
In terms of inward capital flow, while no significant impact is likely in the short-term, some segments of the market are worth watching carefully. Asian investors have keen interest in income producing real estate and developments, looking to establish their footprint across major global geographies. These intentions may well include the Middle East - and there are initial tentative signs of this sentiment coming through from CBRE's 2014 Asian Investor Intentions Survey, where a handful of investors expressed interest in diversifying into the region.
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