Middle East property investments outside region rise in H1: CBRE

Updated 10 September 2015
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Middle East property investments outside region rise in H1: CBRE

DUBAI: The value of Middle East investments in real estate outside the region surged 64 percent to $11.5 billion in the first half of 2015, although two deals by sovereign funds accounted for nearly half this year’s total, consultants CBRE say.
The splurge came despite a 44 percent drop in USlight crude oil prices in the 12 months to June 30.
The CBRE said sovereign wealth funds accounted for $8.3 billion of the spending in the first six months of this year — almost quadruple their outlay of $2.27 billion in the prior-year period.
“The size of the region’s foreign investment makes the Middle East the third-largest source of cross regional capital globally as Arab investors look for brighter investment prospects internationally,” Nick Maclean, CBRE Middle East managing director, said in the statement.
This year’s spending includes Qatar’s $2.5 billion investment in Maybourne Hotels and Abu Dhabi Investment Authority’s (ADIA) $2.4 billion purchase of a 50 percent stake in three Hong Kong hotels.
These deals helped make London, with $2.75 billion, and Hong Kong, with $2.4 billion, the top destinations for Middle Eastern property investors. New York was third with $1.1 billion and Milan’s $990 million placed it fourth.
In terms of sectors, hotel investments rose 437 percent to $6.75 billion — or 59 percent of total Middle East spending — while office acquisitions fell by nearly half to $1.99 billion and retail purchases dropped 40 percent to $708 million.
Other buys, which include residential property, jumped 144 percent to $1.66 billion.
“Hotels (are) growing in importance as sovereign wealth funds and high-net-worth individuals focus on real assets that generate long-term revenue,” said Iryna Pylypchuk of CBRE Global Research.
Property purchases by non-sovereign wealth funds fell to $3.2 billion in the first half of 2015, from $4.7 billion a year earlier, according to Reuters calculations based on CBRE data.


Kuwait Energy starts producing natural gas from field in southern Iraq

Updated 44 min 35 sec ago
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Kuwait Energy starts producing natural gas from field in southern Iraq

BASRA: Kuwait Energy PLC started producing natural gas from Siba on Wednesday, the first gas field to be brought on stream in the south of Iraq, an Iraqi oil executive said.
Siba began producing gas at an initial rate of 25 million cubic feet a day (mcf/d), which should rise gradually to 100 mcf/d by the end of the year, said Kareem Abd Oda, the director general of the joint venture established by Iraq and Kuwait Energy to develop the field.
Siba, south of the city of Basra, is producing natural gas and gas condensates, he added.
The other hydrocarbon reservoirs of southern Iraq that are already in operation produce natural gas alongside crude oil.
The gas extracted in several of these fields is burnt off instead of being captured, as the country lacks the capacity to process it into fuel for local consumption or exports.
Energy-rich Iraq is looking to boost oil and gas production with joint ventures with Kuwaiti, Turkish and Egyptian firms, as it rebuilds its economy following years of turmoil, including the takeover of large parts of the country by Daesh in 2014.
The semi-autonomous Kurdistan Regional Government has started producing natural gas from fields in northern Iraq.
Iraq hopes by 2021 to end gas flaring, which costs nearly $2.5 billion in lost revenue for the government and would be sufficient to meet most of its unmet needs for gas-based power generation, according to the World Bank.
Iraq holds on Thursday an auction of oil and gas exploration contracts in 11 blocks alongside the border with Iran and Kuwait and in offshore Gulf waters. The new contracts set a time limit for companies to end gas flaring from oilfields they develop.
Iraq is the Organization of the Petroleum Exporting Countries’ second-largest producer after Saudi Arabia.
Companies including BP, Exxon Mobil, Eni , Total, Royal Dutch Shell and Lukoil helped Iraq expand production in the past decade by more than 2.5 million barrels per day (bpd) to about 4.7 million bpd.
Iraq’s crude exports from its southern region on the Gulf have averaged 3.5 million bpd so far in April, two oil executives told Reuters on Wednesday.
That is higher than the March average of 3.45 million bpd.