x Abu Dhabi, UAETuesday 25 July 2017

Property in Europe lures Gulf buyers

Investors from the Middle East accounted for 12 per cent of all buyers of European property in the second quarter of this year.

Investors from the Middle East accounted for 12 per cent of all buyers of European property in the second quarter of this year, according to research published yesterday by CBRE.

Buyers from the Arabian Gulf accounted for €2.9 billion (Dh13.61bn) of the total €24.3bn of property sold in the United Kingdom and on the continent during the three months to June as investors sought to diversify their portfolios and invest in havens.

European property also proved popular with other global investors, as North Americans accounted for 24 per cent of cross-border investments over the period and Far Eastern investors made up 11 per cent.

In total, non-European investors bought property worth a total of €5.8bn - the highest amount since the second quarter of 2007, before the global financial crisis.

"Non-European real estate investors are currently dominating the markets in which they are active," said Jonathan Hull, the head of European, Middle East and African capital markets at CBRE.

"All of the 10 largest transactions in London in [the first half of this year] 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."

CBRE said the figures indicated investors based in the Gulf were set to continue their involvement in the region, especially through forming joint ventures.

"European property markets and infrastructure continues to prove interesting for Middle East investors," said Nicholas Maclean, the managing director at CBRE Middle East.

"What we are likely to see going forward, however, is co-investment activity, particularly involving Middle East sovereign funds and Chinese state or quasi-state investors."

Despite the increase in non-European investment, the total value of property deals completed during the period was 5 per cent lower than the previous quarter and 9 per cent lower than the same period a year earlier.

lbarnard@thenational.ae