- Middle Eastern investors expected to spend US$180 billion in global commercial real estate markets in the next 10 years
Dubai, 23 September 2014 – Global real estate
consulting firm, CBRE, in association with Dubai International Financial Centre
(DIFC), hosted its inaugural “Global Investment Summit 2014” in the DIFC, Dubai.
Industry experts including, Nicholas Maclean,
Managing Director, CBRE Middle East; Mark Collins, ED-Chairman UK Residential,
CBRE; John Harris, Chief Commercial Properties Officer, DIFC Properties; Chris
Ludeman, Global President of Capital Markets, CBRE New York; and Jonathan
Silver, Partner, Clyde & Co, debated a number of hot topics relating to inbound
and outbound capital flow from the region, as well as highlighting the
investment opportunities that exist in the UAE and across the globe.
According to CBRE’s recent ‘Middle East: In
and Out’ report, Middle Eastern investors are expected to spend US$180 billion
in commercial real estate markets outside of their own region over the next
decade. 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.
"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,” said Nick Maclean,
Managing Director for CBRE Middle East.
Europe is the preferred target with 80% 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.
"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, set to enter the market over the next couple of years,
the demand for real estate is increasing strongly,” added Maclean.
The summit also highlighted how Dubai
continues to be the destination of choice for inbound capital in the region.
Dubai’s Business and Consumer confidence indexes remain in positive territory,
a healthy indicator for the overall state of the economy.
Commenting on state of local real estate
market, John Harris, Chief Commercial Properties Officer, DIFC Properties, said
“Dubai’s economy is experiencing robust growth and on the back of this growth,
real estate assets are witnessing exponential growth. The government has
introduced various transparency and regulatory measures to boost investor
sentiment. Consequently, we anticipate the Emirate to observe healthy
investment appetite from investors.”
Speaking on the DIFC’s tenth anniversary,
Harris added, “As we celebrate our first decade of doing business in the region,
DIFC is accelerating expansion plans to facilitate more businesses in the
vicinity. In a matter of 10 years we have brought DIFC forward on a global
stage as the key financial hub in the Middle East.”
The CBRE report indicated that 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.
London continues to be the destination of choice for Middle East property
investments.
“Mark Collins, Executive Director-Chairman,
UK Residential, CBRE, said, “The UK market, especially London, continues to be
an attractive market for Middle Eastern capital. The residential private rented
sector (prs) in particular is proving increasingly popular, and represents a
new opportunity for investors to deploy capital in what we consider to be a
rapidly expanding market.”
“Culture,
openness and favorable taxation laws are significant push factors for Middle
Eastern buyers towards the UK.”
