Logistics, residential real estate rentals and healthcare are likely to be drivers for investment for the wealthiest in the Middle East this year, according to Knight Frank’s Wealth Report 2021.
Interest in data centres and the industrial sector are also set to increase among ultra-high-net-worth individuals (UHNWIs), those with $30 million or more, in the region, according to new data.
The Wealth Report 2021, published on Wednesday, showed that private capital has been undeterred by the Covid-19 pandemic and has continued to invest in commercial real estate around the world.
The volume of private capital invested globally was about $232 billion – 9 percent above the ten-year average, albeit down on 2019 levels.
Looking forward, the Knight Frank Attitudes Survey highlighted that a quarter of UHNWIs plan to invest in commercial real estate assets in 2021. In the Middle East, this number sits slightly lower at 23 percent.
The US ($141.7 billion), Germany ($11.1 billion) and the UK ($10.6 billion) were the top three countries for private capital real estate investments in 2020 with the majority of countries in the top 10 relying on domestic investment over cross-border investment.
Victoria Ormond, capital markets research partner at Knight Frank said: “There are a number of drivers set to shape markets throughout 2021 – the move to safe havens – large, relatively liquid, transparent markets should continue to attract global investment. Global travel disruptions also provide opportunity for private investors to leverage understanding and ties to more local markets, which under usual circumstances might face larger competition for assets by institutional investors as well as ESG – something private investors cannot afford to ignore and the rise of data centres – where there is huge potential for investment opportunities.”
Alex James, partner, head of Private Client Advisory, Commercial, added: “Commercial real estate provides investors with a relatively high yielding stable income return, the potential for capital value growth and diversification. These are all key drivers in preserving wealth for future generations and protecting against the impact of the global pandemic.
“While the pandemic has impacted the way we live, work and do business, there is renewed optimism in 2021 that as travel restrictions reduce and the rollout of the vaccination programs reaches advanced stages, private capital will look to increase its exposure in familiar markets and focus on sectors with strong long-term fundamentals.”
Follow us on
