The fragile state of the European economy has meant that politicians in the region have been keener than ever to attract Middle Eastern investors. In fact, according to Bain, investments in European companies by Middle Eastern businesses and investment agencies more than doubled in 2024, helped by a relatively sympathetic regulatory regime and welcoming European administrators. There has been a particular focus on infrastructure investment with activity driven by some of the ‘national champions’ which have developed in many GCC countries.
The enthusiasm for Middle Eastern investment has been helped by the global geo-political environment. China is now seen as a ‘strategic adversary’ by European governments and since the invasion of Ukraine, Russia is no longer a viable investment partner. Although the GCC countries have maintained a position of neutrality regarding East-West relations and tensions, European governments regard them as a reliable source of investment. This obviously suits Middle Eastern administrations which can use investment as a way of increasing political influence throughout the European region.
Transport infrastructure projects have been a focus for this investment. The UAE’s DP World, the global ports and logistics operator, announced plans for a £1 billion expansion of its UK port, London Gateway. As well as the UK, DP World also announced a €191m expansion of its container and Ro-Ro hubs facilities at the Port of Constanta in Romania to take advantage of re-shoring and near-sourcing trends, especially in the Central and Eastern European automotive sector.
Qatar has been one of the most active investors in Europe, including in the transportation and storage sectors. QTerminals, a Qatari port operator, acquired Kramer Group, the only independent terminal in the Maasvlakte area of the Port of Rotterdam. This has given the company a major foothold in the container handling and storage, terminal, container development and logistics services sector at a critical European gateway port. It has also revealed plans to construct and operate a new deep-water container terminal in Świnoujście port on the Baltic coast in Poland, as part of its strategy to expand and strengthen its presence in the global maritime sector.
Saudi Arabia has also been involved in a high profile transport infrastructure investment. In June 2024, its Public Investment Fund acquired a stake in one of Europe’s largest airports, London Heathrow. Qatar Investment Authority is also included amongst the airport’s other major shareholders.
However, there are limits. National security concerns have already been used to prevent several deals – especially in the energy, telecoms and media sectors. The region’s unwillingness to whole heartedly commit to the West in its power struggles with China, or indeed, with Russia and Iran, means that GCC countries may find themselves frozen out of strategic advanced communications and technology projects.
In addition to security concerns, DP World’s development in London Gateway became mired in controversy after criticism of the company by a leading UK government figure angry over the treatment of workers in a subsidiary ferry company. After a swift U- turn, an announcement of the investment was eventually made at a UK investment conference as planned, although not before the incident had caused severe embarrassment to the UK’s prime minister.
There are other signs that the days of Europe looking to the Middle East as a ‘cash cow’ may be coming to an end. Saudi Arabia has its own economic worries, caused by falls in the price of oil. Consequently, this has resulted in a reassessment of where funds should be directed with the government deciding to prioritise investment in its own domestic projects, such as Neom.
Even so, a shared vision related to the development of global supply chain assets such as ports and airports provides a powerful imperative for investment in European transport infrastructure. It not only generates economic value in Europe, but also reinforces the GCC as a global hub – a bridge between East and West. Investment in European projects and infrastructure by Middle Eastern governments and businesses will no doubt continue, but not necessarily at the same rates which have been seen over the past decade.
Author: John Manners-Bell
Source: Ti Insight
Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.
Visit GSCI subscription to sign up today or contact Michael Clover for a free demonstration: [email protected] | +44 (0) 1666 519907
For your logistics and transportation management needs
Providing high frequency logistics and supply chain data and analysis for all those invested in the industry.