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.


Chinese president Xi urges financial risk prevention while seeking stable growth

Updated 43 min 42 sec ago
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Chinese president Xi urges financial risk prevention while seeking stable growth

  • China’s economy is growing at its slowest pace in almost 30 years
  • Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task

BEIJING: China should seek stable development of its economy while not forgetting to fend off risks to its financial system, Chinese President Xi Jinping said, state news agency Xinhua reported on Saturday.
China’s economy is growing at its slowest pace in almost 30 years, spurring policymakers to bolster growth by easing credit conditions and cutting taxes.
“It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the economy operates in a reasonable range,” Xi said.
Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the agency cited Xi as telling a study session for senior Communist Party officials on Friday.
On Wednesday, Premier Li Keqiang reiterated that China would not resort to “flood-like” stimulus such as it unleashed in past downturns.
But after a spate of weak data, investors are asking if Beijing needs to speed or boost support to reduce the risk of a sharper slowdown.
Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy, which would ease financing costs but risk adding to a mountain of debt.
To free up more funds for lending to small and private businesses, the central bank has cut the reserves that banks need to set aside five times in the past year.
Last month, Chinese banks made the most new loans on record, a total of 3.23 trillion yuan ($481 billion). A central bank official said previously that no credit floodgate had been opened, and the lending jump showed recent easing steps were working.
China’s financial sector must serve the real economy, Xi said, but stable growth and risk prevention must be balanced.