Led by sovereign wealth funds, investors from the Middle East accounted for nearly US$9.8 billion of investment sales during H1 '16, or more than 20% of global cross-regional sales volume during the period. The two most notable examples over the past 18 months were the $3.1-billion joint venture of the Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board in a 55-million-square-foot US industrial portfolio, and QIA's acquisition of a 44% stake in Brookfield Property Partners' Manhattan West mixed-use development on the Far West Side of Manhattan.

Since being at the bottom of the market in 2009, investment from the Middle East has grown much faster than the market as a whole and faster than any other cross-regional activity, says CBRE. Capital flows are expected to remain high as Middle Eastern SWFs increase the weighting of their portfolios and include a higher proportion of property.

LOS ANGELES—The $622-million investment in Empire State Realty Trust by the Qatar Investment Authority illustrates a recent uptick in Middle Eastern investment in New York City specifically and US commercial real estate generally, CBRE Group said Tuesday. The firm said investors from the Middle East have remained active buyers despite a slowdown in global investment turnover seen in the first half of 2016.

During 2015 and H1 of this year, New York City was the top destination for Middle Eastern investors with US$6.5 billion in acquisitions, followed by London with US$4.7 billion, Singapore (US$2.5 billion), Hong Kong (US$2.4 billion), Paris (US$2.2 billion) and Milan (US$1.3 billion). Both the US and Asia have seen a substantial increase of investment activity over the past 18 months, after being under-represented in Middle Eastern investment strategies.

“The destinations of investment flows from the Middle East are becoming more diverse and are no longer solely concentrated on London and New York City,” says Chris Ludeman, global president of CBRE Capital Markets. He cites other U.S. cities such as Los Angeles, Washington, DC, Atlanta and Miami, as well as Asian markets “moving up on their agenda. The major Australian cities could be next.”

Ludeman says CBRE expects investment flows from the Middle East to be “substantial for the near future. Interest in the hotels sector will remain strong, while the industrial and logistics sector will attract an increased share of capital.”

Led by sovereign wealth funds, investors from the Middle East accounted for nearly US$9.8 billion of investment sales during H1 '16, or more than 20% of global cross-regional sales volume during the period. The two most notable examples over the past 18 months were the $3.1-billion joint venture of the Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board in a 55-million-square-foot US industrial portfolio, and QIA's acquisition of a 44% stake in Brookfield Property Partners' Manhattan West mixed-use development on the Far West Side of Manhattan.

Since being at the bottom of the market in 2009, investment from the Middle East has grown much faster than the market as a whole and faster than any other cross-regional activity, says CBRE. Capital flows are expected to remain high as Middle Eastern SWFs increase the weighting of their portfolios and include a higher proportion of property.