Both institutional investors as well as families and high-net-worth individuals have found U.S. real estate a great investment vehicle, primarily core assets in primary markets. Have you seen any significant shifts in the investment patterns of Middle East investors in U.S. real estate and why?
The weakening price of oil through the years has led many Middle Eastern investors to shift their investment strategies and diversify into different sectors. They became more active in their investments locally (home countries), while globally they have leveraged the fact that they have become an important source of capital. Investors from the Middle East including institutional, families and high-net-worth individuals have found the U.S. real estate market to be both rewarding and secure and, as a result, their appetite for real estate investments continues to increase.
After the 2020 economic impact of Covid-19, the U.S. market has shown to be recovering very quickly which is evidenced by the current real estate market prices (cap rates) and the increase in demand. Realizing such recovery and the need to identify attractive investment opportunities and place capital, demand from Middle Eastern investors for U.S. real estate has increased and is evidenced through these recent acquisitions:
• Bahrain’s GFH Financial Group announced in July 2021 that is has signed to acquire a student housing portfolio affiliated to top rated universities located in the United States valued at $100 million.
• Kuwait’s Rasameel Investment Company announced in Q2-2021 the acquisition of an office property in Cincinnati, Ohio for a total investment value of $105 million.
• Bahrain based investment management firm Investcorp, acquired two residential properties in Southern Florida, for approximately $164 million.
• Dubai’s Gulf Islamic Investments (GII), just announced in July 2021 the acquisition of The Concourse Office Park, a prominent suburban office campus in Jacksonville, Florida for a total investment value of approximately $50 million.
Investment into the U.S. real estate market by Middle Easterners will only continue to increase. Real estate remains one of the most popular asset classes for wealth preservation and the U.S. market allows investors to benefit from increased opportunity, growing demand and higher returns.