Middle East driving global commercial property recovery

The Middle East and Asia are driving a recovery in the global commercial real estate market, new data suggests.

Transaction volumes in the global commercial real estate markets are up by 11% in the first half of 2013 compared to the same period last year, research by Jones Lang LaSalle finds. Volumes in the second quarter reached US$114bn at a global level, up 4% on the second quarter of 2012 and confirming the stability of the recovery.

Volatility in the equity and bond markets seems to be driving investors towards commercial property. There has been a strong upsurge in the last five quarters as volumes exceed US$100bn, indicating strong and sustainable growth is on the agenda. The Asia Pacific and the Europe, Middle East and Africa (EMEA) regions has led the growth momentum, achieving volume growth rate of 11% and 12% year-on-year, respectively.

As well as sustaining growth markets, investors from the Middle East are playing a pivotal role in stabilising the global real estate markets. The international financial purse of the Middle East has propped-up developments in the world’s largest cities, particularly in the luxury and commercial property space, where high net worth individual investors are seeking to diversify their asset portfolio and hedge against risks by securing prized assets.

The trend has recently been confirmed in London, where a record 82% of property activity was backed by foreign investors. The surge of money came predominantly from Asia and the Middle East, resulting in UK buyers accounting for less than one-fifth of all commercial purchases during the first half of the year.

TMF Group is a leading provider of accounting and corporate secretarial services to the real estate investment industry. We have significant experience and expertise in offering a comprehensive range of services to real estate investment companies and related parties in multiple jurisdictions including holding and finance companies, funds, CMBS and RMBS transactions.

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