Commercial real estate is expected to become an established component of the investment portfolios of the ultra-high net worth individuals (UHNWIs) from the Middle East and North Africa (Mena) region over the next decade, said a report.

While 82 per cent of UHNWIs from the region have invested in residential property over the past decade, only 53 per cent are expected to allocate funds to the asset class over the next decade, according to a survey conducted by Knight Frank in conjunction with ultra-wealth intelligence consultancy Wealth-X.

"Despite the recent decline in oil prices and the slowdown in global trade and commercial volumes, UHNWIs are committed to the growth of businesses and the industrial, logistics and transport sectors over the next decade," stated Dana Salbak, the head of Mena Research at Knight Frank.

Responses from Mena region reveal a growth in allocation to offices from 41 per cent between 2005 and 2015 to 53 per cent between 2015 and 2025, stated Knight Frank in its 2016 Attitudes Survey.

"We also see the emergence of warehousing and logistics as a key element in UHNWIs real estate portfolio over the next decade, with 32 per cent revealing they would invest in assets within the sector," observed Salbak.  

"While residential property was historically seen as a secure form of investment, the volatility of the asset class has made the commercial sector more appealing as its value extends beyond the ability to produce income," he added.

In terms of location, the total cross-border investment from Middle Eastern capital into commercial properties focused on the major global gateway cities of London, Paris, New York and Sydney, according to the Knight Frank survey.

"The availability of diverse investment products (for example, REITs) have made property more accessible to a wider range of investors, while the high level of market transparency and diverse expertise across these markets enables private investors to overcome their knowledge gaps," he added.-TradeArabia News Service