Investors from the Middle East are among the world’s most generous and that is why different countries fight to get their attention. However, it is the United Kingdom that will be the most preferred location for investors from the region. According to CBRE’s “In and Out” report for the Middle East, the majority of ME investors will pick the U.K. and more particularly London over all other commercial real estate markets.
CBRE predicts that the region’s investors will spend almost $85 billion on property in the United Kingdom over the next ten years. That is nearly $25 billion more compared to what they are expected to invest in countries from continental Europe, like Spain, France, Italy and Germany. That makes the Old Continent the ultimate top choice for investors from the Middle East. Around 80% or $145 billion of all their real estate spending by 2024 will go to Europe. As a result, seven out of the ten property hotspots for the region’s investors are located on the Old Continent. London is heads the list with an unmatchable popularity of 44%. Second is Paris’ commercial property market which is predicted to lure 15% of Middle East’s investors. Although Milan is third on this ranking, its popularity is measured at barely 4%. In other words, investors’ activity over the next one decade will be largely focused in the U.K. capital. A similar tendency was observed last year, when 90% of the commercial property investments coming from the Middle East went to the Europe.
The research explains that compared to investors from other parts of the world, those in the Middle East seem to be avoiding diversity. However, it states that this might have to do with the fact that ME investors are big players which are searching for ways to preserve their wealth. That is why they are more interested in long-term opportunities like prime developments in key markets. Asian investors, on the other hand, have more limited resources and often take big risks in an attempt to accumulate large amount of money in short time.
According to the report, by 2024, ME investors will spend about $180 billion across other regions on commercial property alone. This is an astonishing increase, since during the period 2007-2013 their investments on foreign markets were estimated at $45 billion. This is not even half the amount of what they are expected to spend over the next few years. In addition, Middle East investors will direct around seven times less money to their own regional markets.
Also, the region’s SWFs (Sovereign Wealth Funds) were found to be one of the biggest and most central capital sources. CBRE has estimated that they make up 35% of the world’s SWFs AUM (Assets Under Management).
Property hotspots for Middle East investors:
London
Paris
Milan
Lyon
Los Angeles
Dusseldorf
Washington
Atlanta
Barcelona
Berlin
