New York, London, Washington DC Top Target Cities
According to global property advisor CBRE, Middle Eastern investment in global commercial real estate reached $10.1 billion in the 12 months leading up to Q2 2017, with the United States the top country target, while New York City and Washington are among the leading cities.
After a period of exceptionally strong investment activity, outbound investments from the Middle East eased and returned to similar levels as recorded in 2013 and 2014. The Middle East nevertheless remains a major source of capital globally, representing 8 percent of total cross-regional investments between Q2 2016 and Q2 2017.
The U.S. is the top country destination for Middle East investment volume, reaching $3.9 billion in the year to Q2 2017, slightly down from $10.3 billion during the same period in the previous year. London ($1.68 billion) was the leading city target for Middle Eastern investors, followed by New York ($820 million) and Washington, D.C. ($469 million).
“Investors from the Middle East remain active buyers in the global real estate market and continue to target core assets with long leases in safe-haven locations. The recent decline in oil price only strengthened the case for investors to diversify their income streams, both in terms of asset classes and geographies; they are taking a long-term view,” said Chris Ludeman.
In line with previous years, Sovereign Wealth Funds remain the largest source of Middle Eastern capital, acquiring $5.4 billion in real estate assets globally between Q2 2016 and Q2 2017, although this represents a decline of 17 percent year-over-year. High net worth individuals and private investors from the region were less active compared to previous years, which indicates that this group might be more susceptible to adverse market conditions.