With global real estate markets on the recovery track from COVID-19, and global lockdown restrictions easing relative to last year, MENA real estate investors are keen to get back onto the investments field.
Wealth managers in the MENA region expect their clients’ wealth to mostly increase in 2021, and 31% of Middle East clients plan to buy a new home this year. Here’s a snapshot of the top global investment decisions for MENA real estate investors.
TOP DESTINATIONS FOR MENA REAL ESTATE INVESTORS
The UK remains a favourite among MENA real estate investors for its strong yield opportunities and a weakened pound. While investments fell to its lowest level in a decade in Q2 2020, investor sentiments improved over the next quarter as lockdown restrictions were eased. Nearly USD 500 million was transacted in Q3 2020, an increase of 26% from the same period in 2019.
At the same time, investor interest is also diversifying outside of London, into Glasgow, Cardiff, Bristol, Manchester, Edinburgh, Birmingham, and Leeds.
In line with global trends, the US is also a top investment destination for MENA real estate investors. Chicago, Boston, Washington DC, Los Angeles, and San Francisco continue to be global leaders for office and retail yields.
Further, Los Angeles, Miami, and Vancouver have already reported a rebound to pre-pandemic sales of luxury residential properties in prime locations. Miami and Los Angeles are further expected to have an optimistic forecasted change in luxury property prices.
As a global tourist destination, the country has been on the receiving end of foreign investments, which increased 14.7% year on year in 2019. In addition to its tourist economy, lowered property investment limits for citizenship in the country have previously attracted MENA real estate investors, and this trend is expected to continue.
Following the UK and the US, both of which dominate global real estate capital inflows, MENA real estate investors are also looking closely at Turkey for opportunities.
Spain has also emerged as a destination of choice for MENA real estate investors. In particular, this is because of steep discounts in Spain’s hospitality industry, with hotels going at a bargain of 15% to market price.
With most capital outflows from the MENA region going to Europe in the first quarter of 2021, Spain was among several European countries to benefit from the trend.
Real estate opportunities are opening up across Africa for MENA real estate investors. With urbanisation growing rapidly in sub-Saharan Africa, and the strategic benefits of geographical proximity between the two regions, several projects by investors from the MENA region are now emerging across the African continent.
In recent years, MENA investors have been paying closer attention to Nigeria, South Africa, Kenya, Rwanda, Senegal and Ghana as they look at their energy, agriculture, and infrastructure sectors.
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