Middle East Investors to Spend
$180bn On Global Real Estate Over Next 10 Years – www.dubaibusinesskey.com
Sovereign
wealth funds in the region are expected to make the biggest investments, with
Europe slated to receive the bulk of the amount.
The UK is
expected to receive 80 per cent of the investment.www.dubaibusinesskey.com
Middle Eastern investors are expected to spend $180
billion on buying commercial property outside their own region over the next 10
years, A significant chunk of that investment – roughly $130-$140 billion – is
expected to come from regional sovereign wealth funds, while investors, property
companies and developers will account for the remaining amount. Dubaibusinesskey.com.
Europe is the preferred target and is expected to receive 80 per cent of the
$180 billion (around $145 billion) as it offers “diversification, cultural
acceptance, high liquidity and market transparency,. While close to $85 billion
will flow into the UK, $60 billion will be invested in continental Europe, with
France, Germany, Italy and Spain among the key target markets.
Favorable taxation laws are significant push factors
for Middle Eastern buyers towards 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 Sharia-compliant Islamic bonds, confirm Europe as the favoured
destination for Middle Eastern capital.”
The remaining 10 per cent of the $180 billion will be
intended for allocation towards Asia Pacific, it estimated. 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.
Regional investors spent $45 billion between 2007 and
the end of 2013 on global real estate outside the Middle East, including $20
billion invested in commercial property in the last two years alone.
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.
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