10 / 13
It is expected that by 2019, some $129bn
of privately held money will head out of
Saudi Arabia for investment overseas,
more than 30 percent into real estate.
Some $60bn of Gulf money will be
invested in European real estate in the
coming decade. Al-Mazaya Holdings
Weekly Real-Estate Report states it is
not surprising that real estate is now
such an attractive field of investment
for Gulf societies – the latest available
research shows in 2014 some 25
percent of high net worth individuals
made their fortune from financial
services, whereas 40 percent made
their money in real estate. In fact, Saudi
Arabian investment is a significant
driver of the success of Dubai real
estate – last year some AED23bn
invested into Dubai came from Saudi,
demonstrating the high regard the
Dubai market is held in in the kingdom.
10
Certainly, too, the downward trajectory
of the oil price in recent months has
not been helpful in terms of boosting
liquidity levels in theGulf for investment
in real estate, nor has the widely
predicted consequential reduction in
GCC state infrastructure spending
plans given markets reason to expect
real estate values to correspondingly
tick upwards. However, we still see
demand for real estate in the Gulf,
although not at levels witnessed in
European markets, which enjoy safe-
haven status during times of fiscal
uncertainty. High net worth individuals
all over the world are currently looking
to buy real estate in Europe or America
over the Near, Middle and Far East. Hotel
real estate in Europe is particularly
attractive and viewed as low risk.
It is worth pointing out that last year
alone, the USA received some $104bn
in real estate investment from overseas.
Within Europe, the most attractive
destinations in which to park money
in the form of bricks and mortar were
Berlin, Barcelona and Paris, with London
at the top of the list. Taking the Gulf
specifically, Europe accounted for some
90 percent of overseas investment into
real estate, with the majority of that money
invested into luxury developments.
Al-Mazaya Holdings Weekly Real-Estate
Report concludesbystating that real estate
retains its lustre, both within the Gulf and
abroad, whatever the prognostications of
naysayers. Downturns are short-term. The
long-term trajectory of the market in the
Gulf and theWest is onwards and upwards.
Mazaya Monthly Real Estate Report -
Week 3 - November 2015