Middle Eastern investors drive cross-border recovery as property investments reach their peak
Increased investments made by Middle Eastern nationals, is helping to drive global market recoveries, as cross-regional property investments hit their highest level since the onset of the global financial crisis in 2007.
According to research conducted by CBRE, Middle Eastern investors are the fourth largest cross border real estate investors in European property by nationality. They are followed by America (24%), Europe – excluding Germany, the Netherlands, Austria and France (14%) – and the Far East (13%).
“European property markets and infrastructure continues to prove interesting for Middle East investors,” confirmed CBRE managing director, Micholas Maclean.
“What we are likely to see going forward, however, is co-investment activity particularly involving Middle Eastern sovereign funds and Chinese state or quasi state investors,” Maclean added.
In Q2 of this year, total real estate investment activity contracted 5% compared to Q1 and is currently 9% below the total for Q2 2011. Yet cross-border investment has increased t5o contribute a total of 46% in absolute terms.
The most significant driver of growth in cross-border investment was acquisitions by buyers from outside Europe.
“Non-European real estate investors are currently dominating the markets in which they are active,” commented Jonathan Hullhead of EMEA capital markets at CBRE.
“All of the ten largest transactions in London in H1 2012 went to foreign investors, with nine of those deals from outside Europe. Cross-regional investors now have a significant influence on pricing in the European market, particularly for the prime product that is in demand.”