Middle Eastern investors have purchased some $1.4 billion commercial properties throughout the United States during the year 2002, more than tripling their 2001 capital investments in American real estate, which totaled $436 million. The surge, evenly driven by Arab and Israeli investors, accounted for about 23 percent of all international transactions in US commercial realty, positioning the region as second only to Europe.
Agaist a backdrop of rising anti-American sentiment throughout the Arab world, the real estate investment rush is attributed to the market’s high attractively, as well as low borrowing costs and world stock markets displaying their worst performance in decades. The figures, released by Real Capital Analytics, a New York-based real estate research firm, are considered to be a conservative estimate, considering most Middle Eastern investors tend to operate confidentially, company president Robert White told the New York Times.
Prominent Arab investors include the Bahrain-based global asset holding firm Investcorp SA and the Gulf Investment House of Kuwait, as well as affluent Middle East families who carry out discrete real estate deals through Western fund management institutions, such as UBS AG, Citibank, Carlyle Group, HSBC Amanah Global Properties.
Middle Eastern investors seek out single-tenant commercial buildings, going for $15-20 million, according Michael McMillen, a partner with New York’s King Spalding law firm. Many prefer to manage their investments through Shariah-compliant investment vehicles, conforming to Muslim law.
Investment patterns among Middle Eastern investors are shifting, observed McMillen, with deals requiring five to seven years to turn profit becoming increasingly popular, against the currently dominant two to three year pay-off investments. Additionally, individual and smaller investor groups are growing more active on the market. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
