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Gulf money sits on the sidelines
These trend-bucking figures appear to show that despite the onset of a world financial crisis this year and a deepening liquidity squeeze, Gulf property investors in the UK have been relatively undeterred.
But with real estate stocks taking a pounding in the GCC recently, Hubbard argues money arrives in the UK during times of volatility elsewhere in the world.
"In the last 15 years, money comes over here in times of uncertainty. Rather than in a steady trickle, money tends to come over here in fits and bursts," he says.
The ongoing banking crisis, which has put equities across the world into freefall over the last month, may also be controlling direct property investment in the UK from the Middle East.
"Many people are nursing some quite big losses on the stock market, particularly those that went into the banking sector. This is a global issue.
"People went into that sector too early, so there is a reluctance now to go into anything too early because we are in uncharted territory," Hubbard continues.
In Paris, Arab investment has all but ground to a halt. There have been no purchases of office buildings this year, unlike 2007, according to Samer Honein, head of Middle East investment at Jones Lang LaSalle in Paris.
"There is nearly no Gulf investment here, apart from hotels. Arabs have historically paid any price for whatever they want to buy, but now this is not the case.
"London is on their shopping list, it is cheaper compared to Paris," he adds.
Honein's Gulf clients have told him they would only be interested in purchasing a building with a yield of 5 percent or more. Most deals coming to the market are developments with a yield of 4.25 percent or lower in Paris.
Luke Condon, who works on investment in property agent Knight Frank's Paris office, says the Dubai-based sovereign wealth fund GIC is waiting to pounce on an asset throwing up a 6 percent yield in the Paris market.
Although there have been no acquisitions of commercial real estate this year, there is continued Middle East interest in trophy buildings in the main Paris CBD (central business district), around the Champs Elysees, Honein explains.
The only Gulf-backed deal in Paris this year has involved Saudi-owned MBI International, which signed an agreement on Oct 26 to buy 12 French hotels from Starwood Capital, in a deal worth around $2bn.
Unless European real estate markets show signs of rebounding, it may be the last big deal involving an Arab investor for some time to come.
January: A consortium backed by Qatari investors acquired an 80 percent stake in the 310-metre mixed-use Shard of Glass development, south of the River Thames by London Bridge Station, set to be Europe's tallest building when it is built in 2011.
A group of four Qatari investors led by the Qatar Islamic Bank and newly established Islamic investment bank QInvest bought a 20 percent holding in the $2.8bn project alongside Sellar Property Group.
May: St Martins Property Group, the real estate arm of the Kuwait Investment Authority (KIA), paid $642m for the 491,000 sq ft City of London office tower, the Willis Building. It is let to insurance broker Willis, and the deal reflected a yield of 5.7 percent.
June: Fund manager Hermes Real Estate sold 45,000 sq ft 3/5 Burlington Gardens in Mayfair to asset manager EPIC for $120.3m, on a yield of 4.05 percent. Middle Eastern money was understood to have backed EPIC.
Aug: A private investor, believed to be Middle Eastern, bought 15 Berkeley Street, an office building in Mayfair, for $49m, reflecting a yield of 5.74 percent.
September: Private London-based Stow Securities bought Claridge House on Davis Street in Mayfair for $25.3m, reflecting a yield of 5.2%. It is thought Stow was backed by a Lebanese investor.
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