Israeli businesspeople, companies and institutional investors invested $2.293 billion in overseas real estate in 2022, international real estate advisors JLL reports. This figure was down just 5.7% from $2.433 billion in 2021 despite the rise in interest rates over the year. It remains unclear whether this level of investment can be sustained in 2023.
In 2020, the years of the Covid pandemic, Israelis invested $2.198 billion in overseas real estate so investment has remained constant for the past three years. The peak year over the past decade for Israeli investment in overseas real estate was 2017 when $6.7 billion was invested.
JLL said, "In the past year, inflation and high interest rates in the global and domestic economy meant that the global and local real estate market showed signs of slowing down, and many investors began to reexamine their investment options. However, it seems that Israeli investors have not stopped investing in real estate abroad."
The focus: Industry, retail and hotels
Segmentation of the data by sectors for 2022 presents an interesting picture: 33% of deals in real estate abroad by Israelis was in industrial real estate, 22% was in retail, 17% in hotels and only 15% in residential real estate, while 13% was in office real estate.
JLL explained, "The preference of Israeli investors is for sectors that show growth. In addition, it seems that last year there was good demand for investments in the office market, despite the decline in global demand. These are mainly deals in offices that are considered to be in demand, premium offices located in the most sought-after areas, and showing good performance."
JLL found that in 2022, Israelis invested $1.311 billion in the EMEA region and just less than $1 billion in the US, similar to the amount invested in each region in 2021. JLL Israel head of capital markets Mor Ziv said, "Israeli investors perceive the challenging period that characterizes the real estate market as an excellent investment opportunity, while others experience it as a global crisis. The US market, as a significant destination for real estate investments, offers Israeli investors a wide variety of investment options alongside strategic connections to strong local partners."
Published by Globes, Israel business news - en.globes.co.il - on July 4, 2023.
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