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DUBAI-Middle East spending on global real estate will surge 50% by the end of the year to $15 billion, making the region the world's third-largest foreign property investor, according to new research by Jones Lang LaSalle. Record oil revenues of the Gulf countries and the diversification of regional economies have prompted Middle East investors to make significant investments in property outside their home markets.

According to JLL's latest Global Real Estate Capital Report, Middle East investors spent nearly $6 billion in buying foreign commercial real estate in the first half of 2006, $4 billion in the US and $2 billion in Europe, mainly the UK. Office investment dominated, while large investments were also made in hotel and retail sectors. Almost half of the total investments in the US were in New York City. The Middle East region's direct real estate investment was estimated at $9.9 billion in 2005. At this pace, the region will be outranked only by the US and Germany.

JLL also identifies the Gulf region as a key source of global capital as increasingly Middle Eastern investors seek to spend in international real estate markets. The main buyers include private equity funds and families.