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Middle East property investment for 2015 breaks record

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Middle Eastern expenditure on international property has never been higher, indicates the latest research. Despite key cities such as London driving the high rates, experts expect real estate investment in the Americas to also break past records.

For the rates to surpass the previous highs, investors must be looking at property feasibility, amongst other factors, in order to invest with such confidence. 

Property investment reaches new highs

As previously predicted, Middle East global real estate investment has hit a record high for investment outside of the region, according to the latest figures from CBRE.

CBRE reported that a staggering US $11.5 billion was spent on real estate worldwide from Middle Eastern investors. This represents the first half of 2015 and has already surpassed the record mid-year investment of US $6.9 billion that was spent in 2007.

The countries with the largest source of capital were Qatar (US $5.2 billion) and the UAE (US $4.6 billion).

Despite weak oil prices throughout 2015, as reported by the Wall Street Journal on September 10, sovereign wealth funds have increased their spending. Investments from state-owned funds made up 72 per cent (US $8.3 billion) of total investment.

The high rate of investment from the Middle East was boosted by the Qatar Investment Authority's US$2.47 billion acquisition of Maybourne Hotels in London, as well as a separate sovereign fund purchasing a Hong Kong hotel group for US $2.4 billion. However, the investment rate is also being driven by wealthy individuals with extremely high net worths. 

London is a popular option for Middle Eastern investors. London is a popular option for Middle Eastern investors.
Wealthy buyers zone in on certain cities

"Due to the size and diversity of Middle Eastern capital from institutional and private sources, it is not surprising that the types and locations of assets have expanded accordingly."

The latest Global Prime Sector report by luxury property development firm Candy & Candy, focuses on key cities that are attracting global investment by such individuals. The report states that there are five key cities that account for 40 per cent of all real estate capital by these individuals: Hong Kong, London, Moscow, Singapore and New York.

London is ranked second for real estate investment with $676 billion and appeals to investors globally, the report states. This is evident by the high interest that London has gained from Middle Eastern investors.

Despite the immense popularity of London, experts expect a shift in focus to the Americas this year. The first half of 2015 has already seen US $2.7 billion invested in the Americas and this is predicted to surpass the 2007 record of US $5.1 billion. New York and Washington, D.C. remained the most sought after areas.

"For 2015 as a whole, we expect Middle Eastern capital flows into the Americas to break the $5.1 billion high mark recorded in 2007. Due to the size and diversity of Middle Eastern capital from institutional and private sources, it is not surprising that the types and locations of assets have expanded accordingly," says the Americas Head of Research at CBRE, Spencer Levy.

Investment in the Americas by Middle Eastern buyers will most likely rise throughout 2015. Ensuring you have a property assessment plan can help keep you one step ahead of market trends. 

Date Published: 13 Sep 2015
Category: General News

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