x Abu Dhabi, UAEFriday 28 July 2017

Middle East investors spark an overseas surge

Middle East investors helped to spark a 40 per cent increase in commercial property transactions in the past year in Europe, Middle East and Africa, says a Jones Lang LaSalle report.

Middle East investors helped to spark a 40 per cent increase in commercial property transactions in the past year in Europe, Middle East and Africa (EMEA), says a Jones Lang LaSalle report.

Total investment across EMEA is likely to reach €100 billion (Dh484.43bn) this year, led by surges in activity in Germany and the Nordic countries, according to an analysis released yesterday by the property consultant.

Cross-border investment, a key indicator of international interest, accounted for 50 per cent of activity, fuelled in part by Middle East equity buyers targeting "trophy assets" in Europe, says the report.

Middle East investors placed US$3bn (Dh11.01bn) in overseas commercial property in the first half of this year, compared with $2.3bn in the first half of last year, said Fadi Moussalli, the regional director of Jones Lang LaSalle's MENA office. He expects this year's figure to reach $5bn.

Qatar investment funds are "among the top five global investors [in commercial property], if not the top one", he said.

Other commercial property experts agree that international investors are shying away from commercial property in the UAE.

"There are a lot of inquiries, but few of them are converting into deals," said Praveen Mehta, the business development manager for Coldwell Banker in the UAE.

Overall, investments in EMEA commercial property should continue to rise next year, "albeit at a slower rate than during 2010". Total investments should increase by 25 per cent to 35 per cent in the next year, the company forecasts, but will be slowed by "significant changes to global debt markets" as banks continue to restrict the amount of debt for acquisitions.

"The large, liquid and transparent markets" in the UK, France and Germany will attract the majority of funds, "but a scarcity of prime product has been constraining investment volumes", said Chris Staveley, the director of EMEA Capital Markets for Jones Lang LaSalle.

Next year "we don't forecast any significant overseas investor activity" in commercial property in the UAE, said Mr Moussalli.

 

kbrass@thenational.ae