09 October 2015
Muscat: During the first half of 2015, $11.5 billion of capital flowed out of the Middle East into direct real estate globally, according to the latest research from global property advisor CBRE Group. Total Middle East outbound investment during 2014 stood at $13.8 billion.

London remained the main beneficiary of investment during the first half of 2015,receiving $2.8 billion and representing 24 per cent of Middle Eastern outbound capital. Notable deals included the $2.47 billion Qatar Investment Authority's acquisition of Maybourne Hotels and the $110 million purchase of the London Midtown office by a private investor. Hong Kong came in second with $2.4 billion, followed by New York with $1.1 billion.

Despite weakening oil prices, acquisitions by sovereign wealth funds (SWFs) increased during first half (H1) 2015. Sovereign spending stood at $8.3 billion, representing more than 72 per cent of total spend. However, the H1 2015 results were boosted by two large hotel acquisitions at $2.5 and $2.4 billion each -- one in London and the other in Hong Kong, by two different SWFs.

Nick Maclean, Managing Director, CBRE Middle East, said, "The size of the region's foreign investment makes the Middle East the third-largest source of cross regional capital globally as Arab investors look for brighter investment prospects internationally. Qatar remains the largest source of outbound capital investing a total of $9.834 billion, while the UAE invested $6.64 billion in global assets during the 2014 and the first half of 2015 combined."

Middle Eastern investors are becoming more active across a wider range of sectors. The hospitality industry shows an upward trajectory and a much greater sense of optimism. Their outbound investments in hotels totalled $6.8 billion in the first half of 2015; a gigantic leap compared to $1.8 billion for 2014 as a whole. In the last year or so, the hospitality sector has really grown in importance on global investors' radar and continues to attract large inflows of foreign capital.

"Real estate investors from the Middle East continue to play a very important role across a broader selection of global real estate markets. Recent acquisitions in AsiaPac -- with close to $3 billion invested in Hong Kong and Sydney in H1 2015 alone -- as well as a broader selection of markets invested in Europe showcase the on-going evolution of their investment strategies. This extends to sector selection, with hotels growing in importance recently as sovereign wealth funds and high-net-worth individuals focus on real assets that generate long-term revenue," said Iryna Pylypchuk, Global Research, CBRE.

© Times of Oman 2015