Despite signs of recovery in the Dubai real estate market over the past few months, there have been few major transactions. Many Middle Eastern investors remain more focused on overseas real estate rather than investing in their own back yard.

Data collected by Jones Lang LaSalle shows that $96 billion (Dh352 billion) of completed commercial real estate projects were traded globally during the third quarter of 2012, bringing transactions for the year to $289 billion. While this figure (which excludes land and residential sales) is down by 10 per cent on the same period of 2011, transaction levels have remained surprisingly robust given the weaker global economic environment.

Middle Eastern investors remain among the most active on the global stage. While a detailed breakdown of sales for the third quarter is not yet available, data for the first half of 2012 shows a marked increase in real estate investment by Middle Eastern players, up by 45 per cent from $2.8 billion in the first half of 2011 to more than $4 billion in the first half of 2012.

Likely reasons for this increased interest are the higher revenues generated from oil and gas exports during 2012, the lack of suitable real estate investment opportunities at home and their desire to diversify portfolios outside of the Middle East.

Destination of choice

2012 has seen a continued focus on mature overseas markets, with London remaining the destination of choice. Middle Eastern investors purchased a total of $1.7 billion in the UK over the first half of 2012, more than twice the $827 million invested during the same period in 2011.

Among the major deals are One Cabot square, (Credit Suisse Headquarters), Canary Wharf, London purchased by Qatar investment Authority for $527 million and 1 Bunhill Row in the City of London, purchased by St Martins (Kuwait) for $290 million. The same trend has continued during the third quarter, with Middle Eastern investors purchasing 68 King William Street in London.

Elsewhere in Europe, Middle Eastern investors have purchased other major real estate projects including 52/60 Champs Elysee, Paris, a trophy retail centre purchased by Qatar Investment authority for $657 million and the Merridien Hotel in, Budapest, Hungary that was bought by the Habtoor Group (UAE) for $71 million.

Middle Eastern investors are also becoming more active traders with sales as well as purchases. Major disposals in 2012 include Essex House Hotel in New York that was sold by Dubai Holdings for around $365 million Kingdom Holdings have also divested of a number of international hotels during 2012 including the old Four Seasons Hotel in Toronto and the Movenpick beach resort in Phuket, Thailand

The recent Cityscape Global in Dubai recognised the strong interest from Middle Eastern investors in overseas markets. In addition to the major focus upon Turkey, there were multiple projects being advertised from the UK, the US, Brazil, India, Poland, Greece, Lebanon and Egypt.

With strong capital flows continuing to swell the pockets of Middle Eastern investors and limited high quality investments being available in their own markets, we expect the interest in overseas real estate to continue over the next 12 months with further major purchases by middle eastern investors likely.

The writer is the CEO at Jones Lang LaSalle, Middle East & North Africa.