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Paris Becomes Main Destination For Middle Eastern Sovereign Wealth Funds According to real estate agencyCBRE, the United Arab Emirates’ property investment in European assets reached almost €1 billion (£864 million) during the second half of 2012, accounting for approximately three percent of allcross-border commercial property purchases across the continent. Paris was the main beneficiary of foreign funds with the Middle East delivering 18 percent of total investment in commercial real estate. The Qatar Investment Authority (QIA), a sovereign wealth fund with about $85 billion (£56 billion) in assets under management, is believed to have beenthe largest Middle Eastern investor in European real estate in 2012, purchasing numerous buildings in Paris, including two luxury properties on the Champs-Elysées. The fund, which bought UK’s Harrods department store chain in 2010 and has accumulated a substantial stake in Sainsbury, also acquired a flagship retail complex from Groupama, a French insurance group,for €500 million (£432 million). Other property investment undertakings by QIA include the $367 million (£244 million) spent on acquiring a Paris building which houses a part of the US embassy and four French hotels formerly owned by Starwood Capital. Rumour has it that the sovereign wealth fund was also the unnamed buyer of a collection of luxury hotels in France with a total price tag of €700 million (£605 million). Another large UAE investor in the second half of 2012 was ADIA, the Abu Dhabi sovereign wealth fund, which bought the 63,000 sq. m. Zuiderpoort office in Ghent, Belgium from Icelandic lender SJ1 in what became Belgium’s largest commercial real estate deal last year. Although financials were not disclosed, analysts have estimated the purchase price to have beenaround €110 million (£95 million). Property investment company IP Global released its property stock performance figures last week showing that traditional central London real estates were especially popular among Middle Eastern investors. While most favoured the “Golden Postcodes” including Mayfair, Belgravia, Chelsea and Knightsbridge, IP Global says that it has recently been advising prospective investors to explore projects in less-known London boroughs, such as Camden, Wandsworth, Fulham and Hammersmith. Paul Preston, Director of IP Global, Middle East said: “The impressive performance of IP Global's London stock last year, with a significant contribution from the Middle East offices towards this, gives up great optimism for 2013 and we are looking forward to announcing upcoming London projects soon." IP Global is also offering property investment through private equity products which have delivered strong returns over the past two years. At the end of 2012 and start of 2013, the firm also had a successful coupon project, which included two central London projects in Islington and Wandsworth, with returns of 11.5 percent payable quarterly over an 18 month period. For more investment news and analyses visit the new investors' portal iNVEZZ.
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