Investors from Middle Eastern countries are expected to spend USD 180 billion in commercial real estate markets outside their region over the next decade with Europe being the preferred target, according to a latest study.
The major increase in flows of Middle Eastern capital into global markets is emerging from the extraordinary mismatch between the lack of institutional real estate in domestic markets and the huge spending power concentrated in the region, a study by global property advisor CBRE said.
Europe is the preferred target with 80 per cent of the USD 180 billion targeted for the region over the next 10 years.
Close to USD 85 billion will flow into the UK, with USD 60 billion directed at continental Europe. France, Germany, Italy and Spain are among the key target markets.
Global real estate markets have seen significant inflow of Middle Eastern capital with USD 45 billion invested between 2007 and the end of 2013 - seven times the reported activity in its home market.
With USD 20 billion invested outside their home region in commercial property in the last two years alone - there is strong evidence that Middle Eastern players are increasing their interest and investment allocations to direct real estate.
"Coupled with increased confidence in global markets and the need for diversification, overseas investment has grown strongly. This trend is set to continue and with new sources of Middle Eastern capital," said Nick Maclean, Managing Director, CBRE Middle East.