The rise of the Middle East influence on UK investment has inevitably been tracked over recent years. This kind of investment has proved one of the most significant factors in the success of and boom in the London commercial property market in particular.
The property broker JLL has carried out a review of the Middle East investment transactions last year, specifically hotel, retail and commercial office property.
The Middle East sovereign wealth funds were party to seven property deals across the globe that were worth in total £3.4 billion last year and there seems no reason for these investors to hold back this year.
The largest deal belonged to sovereign wealth fund the Kuwait Investment Authority, who bought the More London office and restaurant development near London Bridge. The 13-acre site was sold to St Martins, the Kuwaiti government’s property arm, for £1.6 billion.
The Kuwait Investment Authority also purchased 5 Canada Square at Canary Wharf for £360 million.
JLL also reports that the Middle East investment is focused on countries other than the UK, with Abu Dhabi Investment Authority having spread its investment to include 31 Australian hotels, purchased from Tourism Asset Holdings for £430 million. The Abu Dhabi Investment Authority is the second largest sovereign wealth fund in the world, driven, like other Middle Eastern funds, by increased capital made available from oil and gas reserves.
Not far behind last year was Abu Dhabi Investment Council, which purchased six shopping malls in Australia for a total of £360 million.
Other cities benefiting from Middle Eastern capital were Barcelona and Washington DC, where the former’s W Hotel was purchased by Qatar’s Diar for £150 million, while the Kuwait Investment Authority once again stepped in to purchase a £180-million office block in the US city.
There is no indication that this trend will wane any time soon and it is possible that the UK regions will also see increased investment from this wealthy part of the world.
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