Postcatd from my travels


I’ve just returned from two weeks of travel, meeting with both existing and prospective Islamic investors in Southeast Asia and the Middle East. With eight flights covering close to 16,500 miles, there was plenty of time to sleep, watch the latest films, but also catch up on my real estate reading. The recently released JLL Global Capital Flows matched my travels, providing the definitive high level view on worldwide investment trends.

JLL’s research opened with a 6% increase in 2017 real estate transactions of US$698 billion, compared with 2016. All good so far, but the Americas were down 12%, and for the first time since 2010 Europe took top spot with US$300 billion of activity, representing an impressive 43% of the total.

The fall in US activity rings true with me. While there is no doubt that the US remains one of the favorite destinations for Middle East investors particularly, many are frustrated by not finding more
opportunities and various Southeast Asian investors are working out the best way to invest in this continent. It will be interesting to see what 2018 brings, as many investors were pleased to hear the detail on Donald Trump’s tax cuts and its positive impact on real estate investors. As I’ve said before, let’s not forget, Trump is a real estate guy.

As for the rise in European investment, despite the threats of Brexit (inevitably a frequent topic of conversation on my travels), JLL reported that London took top spot globally for transactions. However, among Islamic investors I sense that they were net sellers, with many in the Middle East and particularly Malaysia choosing to cash in on the gains they’ve made over the past few years.

The biggest jump in European activity was in the Netherlands, achieving US$21 billion of volume, 44% above its previous record year. Offering greater value than Germany, a strong economy and with low finance rates, there is no wonder that the country is attractive at the moment, with our own 90 North’s recent acquisitions of ASICS and Danone headquarter office buildings being testament to that.

Sector-wise, while retail was inevitably down 6% on the previous year, with the never-ending shift to e-commerce, industrial logistics was up 38%. Noting Arch Street Capital’s recent activity in the US in this sector, investors were certainly asking how best to invest when yields are getting increasingly low.

So, with thanks to JLL for their research, which I rank among the best in the market at the moment, I return to the office full of optimism for the remaining 10 months of 2018. Islamic investor appetite for real estate remains strong and ambitions for international investment continue to grow.

Original article appeared in Islamic Finance News.