MENA investments in US commercial real estate hit $6 bln: GFH
Investments in U.S. commercial real estate grew at a 30 percent compound annual growth rate (CAGR) during years 2010 and 2015, a recent report by financial group GFH showed.
Such growth was triggered by foreign investment growing at 49 percent CAGR, the GFH said. Middle East investments in U.S. commercial real estate totalled over $6 billion in 2015 driven by sovereign wealth funds of UAE and Qatar.
“The U.S. real estate sector is on the growth path in the backdrop of a recovery in macroeconomic fundamentals, albeit slowly.” The report added.
“With increasing capital availability and financing sources, investments in the U.S. commercial real estate (CRE) market have been growing at a brisk pace, with 2015 witnessing US$533 billion worth of investments, the highest level since the 2007 peak.”
“The office sector is attracting the biggest share of investments, closely followed by multifamily. However, the industrial sector is the fastest-growing sector attracting investments, led by foreign investors who have traditionally been underweight on this asset class.”
Foreign investments in U.S. commercial real estate increased across all property types in 2015, and have grown at a CAGR of 49 percent over the past five years.
Investors from the UAE pumped in US$4.5 billion in the U.S. real estate market over the three years ending in June 2015, with US$1.8 billion coming in the last 12 months ending June 2015, according to the report.
UAE’s major investments have been in the industrial and hotel sectors during this period. Investment in the U.S. multifamily real estate sector from Bahrain totalled US$400 million in the 12 months ending June 2015, with a cumulative total of US$1.1 billion over three years.
Sovereign wealth funds, Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority (QIA) made major investments in U.S. real estate in the fourth quarter of 2015. A joint venture involving ADIA acquired a portfolio of industrial properties of the Exeter Property Group for US$3.15 billion. QIA entered into a joint venture with Brookefield Property Partners for developing the Manhattan West Development project for a total cost of US$8.6 billion. The Manhattan West Development project is scheduled for completion in 2019. QIA bought a partial stake in the project for US$3.23 billion, according to Colliers International.
