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Dubai: Gulf Arab investors could spend $20 billion in 2008 to buy commercial real estate around the world, 38 per cent more than the estimates for 2007, property services firm Jones Lang LaSalle (JLS) said.
Investors from the region bought properties worth $12.5 billion in 2006 and $14.5 billion last year, the firm said.
As a result of the global credit crisis created by the US mortgage meltdown, Gulf investment in global real estate in 2007 fell short of earlier JLS expectations.
Alastair Hughes, JLS chief executive officer for Europe, the Middle East and Africa, said yesterday there are "far few buyers than there were before" and "debt has died up" following the US mortgage meltdown.
But the company is forecasting that real estate acquisitions by Gulf-based investors outside the region will reach $20 billion this year.
The US and Western Europe are the main destinations for Gulf real estate investments. However, Asia has also emerged as a favourite region for Arab investors, said Blair Hag-kull, JLS's managing director for the Middle East.
He said Gulf money is being invested not just on buying buildings but also in developing real estate.
"We anticipate 2008 will be the year that global markets will understand the power of GCC investors," he said while presenting a report on the Gulf real estate sector.
JLS expects global investor interest to grow in the Dubai's real estate sector as the market has become more transparent in regulations.
The real estate investment consultancy's 'transparency index' identified Dubai and Saudi Arabia as amongst the poorest regulated markets globally in 2004. By 2006, Dubai had improved its position a notch. In 2008, JLS expects Dubai will move one more rung up close to countries like Belgium, Switzerland and Germany.
"The rate of change in Dubai is unprecedented and JLS expects to see this development in other GCC states," Hagkull said.
Gulf states are also paying attention to the redevelopment of old city areas.
"For the first time, we are now seeing the redevelopment of cities in the GCC alongside new city developments," Hagkull said, citing the redevelopment plans for the Port Rashid area in Dubai and Mina Zayed in Abu Dhabi.
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