The investors in the Middle East have increasingly become very active across a wider range of industries. This trend is clearly evident in US soil where historically, most of the investors have bought trophy hotels and office buildings in Los Angeles, New York and other gateway markets. With the increase of competition coming from Chinese investors as well as other global capital sources, this means that the investors in the Middle East are searching for alternatives like the reported Abu Dhabi Investment Authority acquisition this year at $725 million of an industrial portfolio amounting to 14.2 million square feet.
The peak levels on the outbound investment for the region may not be the same before the global financial crisis but the capital flows into the US soil is evidently very strong, diversifying and growing in nature. As the bigger sovereign countries seek to have safe havens and a longer term stable growth economically, the flow of capital coming from the Middle East countries will become even much stronger. The Head of Research for the Americas at CBRE said that they are expecting a greater amount of the entire capital to look beyond gateway markets so that they may achieve their objectives.
Non-institutional and private investors have emerged as a major source in the outbound capital coming from the Middle East. The potential for those who are non-institutional investors in expanding their global real estate investment will continuously grow as there is a greater allocation to the real estate today and more concentration on diversification is geared away from the home region. A strong contributing factor to this trend is the weakening of oil prices. This has triggered and accelerated the global deployment of capital with a high demand in value added investments. CBRE has made a forecast that the global real estate investment coming from the non-institutional capital of the Middle East will approximately be between $6 billion to $7 billion annually in het near term.
As one event slows down a sector in the global economy, it brings light to another sector. This is what happened with the oil price crisis. Different businesses will surely make big in the global improvement of the property sector like MC Decorators Ltd, Northampton.