CBRE gives fresh update on Europe to Middle East equity owners

"Many of the major buyers who have been active in the European property market were highly leveraged on mortgages. With the direct losses and wider impact of the sub-prime crisis remaining uncertain and major lenders not willing to take further risks, purchasers who are heavily reliant on debt are now less competitive as buyers," said Dr. Nick Axford, Head of Research at CB Richard Ellis, Inc.

Equity owners from the Middle East are perfectly placed to step into this void and consolidate their presence in the European property market, Dr. Axford added.

"The region has a tremendous amount of privately held equity with very low exposure to borrowing. Middle Eastern investors have been increasingly active in European markets but now they have an opportunity to raise their profile," noted Dr. Axford.

Europe has been benefiting from the rapid globalization of the real estate investment market. In 2006, investment into Europe from outside the region totaled €49bn (Dhs264bn), 22 per cent of total purchases. A further €30bn (Dhs162bn) flowed into Europe during the first six months of 2007.

Middle Eastern investment has been growing rapidly. Almost €7bn (Dhs38bn) was invested into European property in 2006, almost four times as much as during 2004, and a further €4bn (Dhs22bn) was purchased in the first half of this year.

Strong fundamentals, a healthy economy and substantial rental growth, especially in the case of office space, can all be credited for the growing investor confidence in the European market; Dr Axford said quoting research done by CB Richard Ellis among its European investment clients.