Hotels driving Middle East real estate investment

Global commercial real estate investment in Q4 2013 reaches $183bn

Middle East investors were the third biggest contributor to global cross border capital flows last year.
Middle East investors were the third biggest contributor to global cross border capital flows last year.

Middle East investors were among the most active in the global commercial real estate market during 2013, with the number of hotels aquired by Middle Eastern wealth funds rising last year, Jones Lang LaSalle has said in a new report.

The region's investors were the third biggest contributor to global cross border capital flows last year, behind US and Asian investors, the consultancy said.

Fadi Moussalli, head of international capital group in the Middle East at JLL, said: "Transaction volumes of hotels acquired globally by Middle Eastern sovereign wealth funds and ultra high net worth individuals picked up in 2013 and we expect hospitality assets to remain a very appealing asset class.

"Uncertainty due to an instable political context and desire to diversify sources of income outside of home markets will continue to be the main driver behind increased volume of transactions."

He added: "Healthy fiscal surpluses resulting from exports of oil allowed the GCC governments to increase their direct overseas investment activity via their sovereign wealth funds."

Last week, Marriott International confirmed the sale of three of its hotels to companies owned by the Abu Dhabi Investment Authority.

The hotel operator said it has offloaded Edition-branded properties in London, New York City and Miami Beach in a deal worth $815m.

JLL said improving global economic conditions and enhanced liquidity pushed Q4 2013 global commercial real estate investment volumes to $183 billion.

The Q4 figures helped to drive full year volumes to $549 billion - an 18 percent increase on 2012, the report said.

It added that real estate markets have maintained their growth momentum over the last 12 months despite an exceptionally busy end to 2012.

Q4 volumes exceeded a strong third quarter with growth of 31 percent, and recorded further growth of 13 percent compared to the same period last year.

Property types in the global capital flows report include hotels, office, industrial and retail.

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