MidEast appetite for European property grows: Savills

Middle East investors are seeking property investment opportunities across Europe, as Chinese investment into the continent slows, international real estate advisor Savills noted in its recent report.

European real estate is seen as a good investment by those Middle Eastern investors and asset managers looking at growing their international property portfolios, the report added.

After a 2017 dip in global real estate investment from the Middle East due to lower oil prices and less favourable exchange rates, the appetite for European real estate is beginning to rebound. Most recently, Saudi Arabian asset management firm SEDCO Capital acquired three properties worth $179.9 million across France and the UK, Savills noted in the report.

Meanwhile, further Saudi investment has come from Sidra Capital, which has invested in 17 UK real estate projects over the past six years, including the $121.4 million purchase of the prominent office complex Weston House in London’s High Holborn area, the report added.

The report said since June 2017, Bahrain’s Investcorp has acquired UK and European real estate assets totalling over $322 million, including the latest acquisition of five industrial units in Scotland worth $14.8 million and an office campus in Frankfurt valued at $100 million.

UAE capital is also flowing into the UK, Savills noted. In June, Abu Dhabi Islamic Bank structured a Sharia-compliant transaction on behalf of an Abu Dhabi-based private banking client to finance the $32.2 million acquisition of Lateral House in the English city of Leeds, while earlier this year, Gulf Islamic Investments bought commercial office space in Aberdeen totalling $60 million, the report added.

According to Savills, real estate remains an assets class of choice in Europe and the amount of capital invested in the real estate market remains significant.

“Europe remains an attractive investment proposition for investors, supported by an expanding economy, low unemployment and healthy occupier demand for both traditional and alternative building uses,” said Marcus Lemli, head of Savills European investment.