Middle East investors boost commercial real estate in first half of the year, report shows

 
Investors in the region also doubled their investments in foreign properties between January and June this year, compared to the same period in 2009, the report from Jones Lang LaSalle shows.
 
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% year on year.
 
Jones Lang LaSalle also said that the upturn represents a general pick up as confidence returns to the market.
 
‘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.
 
According to the report, 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,’ the report says.
 
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.
 
Total global commercial real estate investment totalled $132 billion for the first half of 2010, compared to $76 billion for the same period in 2009.
 
However, the outlook is still precarious. According to Arthur de Haast, head of the International Capital Group at Jones Lang LaSalle, transaction volumes might not continue to grow at the levels seen in the first half of the year due to mixed economic news and longer transaction processes due to investor due diligence.
 
However, full year volumes will be between $275 and $300 billion for 2010, significantly ahead of 2009 at $209 billion, with cross border investors continuing to be very active, he added.
 
Meanwhile, Kuwait has agreed on a $104 billion support package for the country’s real estate market to finance a string of development projects, with the funding to be supervised by the Central Bank.
 
The new package is designed to help local real estate firms, as well as boost confidence in the banking system in order to ensure the completion of key projects.