MidEast investors raise London real estate spending in 2013

Investment increases from 7.5% in 2012 to 17% of total transactions last year, according to new CBRE research
MidEast investors raise London real estate spending in 2013
(Getty Images - for illustrative purposes only)
By Andy Sambidge
Mon 31 Mar 2014 01:25 PM

Middle East investors significantly increased their investments in London real estate last year, according to new research published by CBRE on Monday.

Investment from the region increased from 7.5 percent of total investment in 2012 to 17 percent in 2013, the research showed.

It said the English capital city recorded the highest ever yearly total seen in Europe for a single city in 2013 to cement its position as the region’s number one investment destination.

Outside of London, Middle Eastern investors spread their capital across the continent, namely in Dusseldorf and Paris and to a growing extent some of the recovering southern European markets, as well as Russia.

Both Middle Eastern and Asian investors recorded their highest ever annual total of European real estate investment with nearly €10 billion worth of transactions each in 2013.

Nick Maclean, managing director, CBRE Middle East, said: “Property markets and commercial real estate in particular across Germany and the UK is witnessing the strongest growth since the financial crisis and we anticipate further commitments from Middle Eastern investors in the future. 

"London, in particular, is capturing the lion’s share of capital mainly attributed to its transparent legal system, stable political and economic environment and above all liquidity – key factors in attracting investment.”

The research showed that a strong finish to 2013 took total commercial real estate investment volume in Europe to €165.6 billion, an increase of 30 percent on the previous year’s total.

The Q4 2013 total of nearly €61 billion was the highest quarterly figure recorded in Europe since Q4 2007.

According to the report, despite the strong growth in total investment activity in 2013, the average deal size recorded remained essentially unchanged at €27million.

Buyers from Asia accounted for 22 of the transactions over €100 million and recorded an average lot size of €126 million. This was only just ahead of buyers from the Middle East, who accounted for 21 of these largest transactions and had an average lot size of €120 million.

Simon Barrowcliff, executive director, Central London Capital Markets, CBRE, added: “London had a phenomenal year with the total value of investment reaching pre-global financial crisis levels. Looking forward to 2014, it is unlikely that the market will repeat this performance.”

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