ME buyers double foreign property investments in H1

DUBAI — Investors from the Middle East had more than doubled their investments in foreign properties in the first half of 2010 compared to the same 2009 period, and remained the second largest inter-regional purchasers of real estate during, the latest report from Jones Lang LaSalle said on Tuesday.

By Issac John

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Published: Wed 15 Sep 2010, 11:25 PM

Last updated: Mon 6 Apr 2015, 11:50 AM

Globally, $132 billion of real estate deals were transacted in the first half, which was 74 per cent higher than the $76 billion in the first half of 2009, research by Jones Lang LaSalle shows.

The global commercial real estate transactions for the same period almost doubled. This was “underpinned by a return to pre-crisis levels of cross-border investment,” Jones Lang LaSalle said.

Cross-border activity, which hit a low of 31 per cent of the total volume in the first half of 2009, bounced back to 43 per cent in the first half of this year, said the financial services company which specialises in real estate.

Cross-border investment continues to be dominated by major and mature institutional investors from the world’s most liquid capital sources, it said. Global Funds, which raise capital in multiple regions, were the most active inter-regional purchasers, while investors in the United States increased their investments by 48 per cent year-on-year.

“The rise in cross border transaction volume also shows a real estate return in the major markets,” said Steve Collins, managing director, Americas, International Capital Group.

Cross-border investment is when both the purchaser and the vendor originate from the region where the asset is located. While inter-regional investment is when all parties involved originate from outside the region where the asset is located.

Looking ahead to the rest of the year, Arthur de Haast, head of the international capital group at JLL, said mixed economic news plus longer transaction processes due to investor due diligence may mean that investment volumes do not continue to grow at levels seen in the first half 2010.

“However, full year volumes will be between $275-$300 billion for 2010, significantly ahead of 2009 [$209 billion], with cross-border investors continuing to be very active.”

Europe had the highest volumes of cross-border activity — 54 per cent — in the first half of 2010.

Richard Bloxam, head of pan-EMEA (Europe, Middle East and Africa) capital markets, said 2010 has seen a bounce back to pre-crisis proportions of cross-border activity after the retrenchment in 2008 and 2009 of many investors to their domestic markets.

Total volumes, while recovering markedly year on year, remain subdued in comparison to 2007.

issacjohn@khaleejtimes.com



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