How was your summer?


Well, the kids are back to school, so that must be the summer officially over. Asking about everyone’s summer recess, it seems to have been busier than most people expected, but perhaps the clues were already there.

Just as we were sett ling in the summer months, Real Capital Analytics (RCA) shared its analysis on the cross-border acquisitions undertaken by Middle Eastern investors for the first half of 2019, and they were up. Materially up. With RCA recording US$8.6 billion of acquisitions for these six months, this was nearly 60% up on the volume for the first halves of both 2017 and 2018.

Digging into the details revealed some further interesting findings. Investors from the UAE and Bahrain were particularly active, investing more than they had done for the whole of 2018.

Half of the investment had gone into the US, representing the second-highest proportion since RCA started recording. While UK volume was down, at 21% of the total, RCA observed that it was not as bad as the political uncertainties of Brexit suggested it might have been. And last but not the least, China attracted Middle Eastern investors for the first time since 2012.

So, plenty going on, but what of the summer itself? Speaking for our own 90 North, we found that investor engagement was far higher than we expected, with most seeking to line up transactions to close upon their return and which remains the focus.

Meanwhile, reviewing the pages of Islamic Finance news, it seems that while SEDCO chose to exit US$338 million of real estate in the US and the UK, others were very much in acquisition mode in the US, as RCA’s analysis suggested that they would be.

Arch Street Capital made a significant acquisition in Delaware of an office property let to chemicals company Chemours for one of its institutional investors. Meanwhile, Bahrain-based GFH Financial Group, again supporting the level of Bahraini activity reported by RCA, made a US$100 million tech offi ce acquisition in Research Triangle Park outside Raleigh, North Carolina. Having bought and sold a property let to Lenovo on the Research Triangle Park, it is a fascinating and still fast-growing area.

Which I guess brings us on to predictions for the balance of the year. Well, as you will know from the news there is plenty going on in the world, but Islamic investors are seeing through the noise to the opportunities that exist, so I predict plenty more activity. Wishing good luck to all!

This article was first published in Islamic Finance news dated 11th September 2019.