Middle Eastern investors have nearly doubled the amount of cash they spent on commercial property in Europe this year, accounting for nearly a tenth of all the money spent on shops, hotels and offices in the first six months of 2013.
Region's investors snap up properties across Europe
Middle Eastern investors have nearly doubled the amount of cash they spent on commercial property in Europe this year, accounting for nearly a tenth of all the money spent on shops, hotels and offices in the first six months of the year.
According to a new study by the property broker CBRE, investors from the Middle East shelled out €5.7 billion (Dh27.93bn) to buy commercial properties across the recession-hit continent during the period.
That amounts to 9 per cent of all €63.3bn transactions during the half-year, and works out as a 90 per cent increase on the €3bn spent by Middle East investors on European property in the same period last year.
Nearly half of all the latest period's investments came from the vast sovereign wealth funds of Qatar, Abu Dhabi, Kuwait and Oman, while London was the main focus for investment. Abu Dhabi Investment Authority in January paid some €250 million (Dh1.22 billion) to buy a Paris office block at 90 boulevard Pasteur, according to the Sovereign Wealth Funds Institute. Other deals included St Martin's, the property arm of the Kuwait Investment Authority, signing a £385m (Dh2.18bn) contract in February to buy Bank of America's headquarters at 5 Canada Square in London's Canary Wharf district, and Qatar Holding's £400m deal to buy the InterContinental Hotel on London's Park Lane in March.
Foreign buyers accounted for 44 per cent of all transactions by value compared with 40 per cent in the second half of last year, with an increase in activity from investors from the US and Canada. However, this remains well below pre-financial crisis levels when they accounted for 50 per cent.
"We are definitely seeing an increase in spending from Middle East investors in London and we expect this trend to continue," said Nick Maclean, managing director for CBRE's Middle East operation.
"Moreover, with Middle East investors increasingly investing in UK companies, which also buy property, the figures here probably represent just a small proportion of the overall sums involved."