Qatar’s overseas acquisitions have been driving growth in the Middle East’s mergers and acquisitions (M&A) market during the first half of 2014.

Qatari deals abroad accounted for 46 per cent of the Middle East’s outbound mergers and acquisitions during the first six months of the year, according to data from Thomson Reuters.

One of the largest deals closed was the acquisition by Qatar’s Labregah Real Estate Company, a wholly-owned subsidiary of Qatari Diar Real Estate Investment Company, of a $2.5bn stake in Qatari real estate developer Barwa Commercial Avenue Company.

The property arm of Qatar’s sovereign wealth fund, Qatari Diar, agreed to the acquisition of 95 per cent of Barwa’s share capital in May.

Barwa Commercial Avenue is a new residential and commercial development being built in the industrial area of Doha.

Boosted by this deal, real estate became the most active sector in terms of regional M&A activity, accounting for 29 per cent of the deals in the first half of the year.

Driven by Qatari deals, outbound M&A deals drove growth in the Middle East, with the value of deals up 83 per cent compared with the same period last year to reach $7.6bn.

In contrast, inbound M&A declined in the first half, falling 19 per cent to $1.3bn. Domestic and inter-regional M&A also dropped, falling 49 per cent to $6.9bn in the first half of the year.

Deal activity in the second quarter of the year was strong, with total deal value reaching $14bn, the highest quarterly value since the first quarter of 2011. It was also 2.5 times the size of the value of deals closed in the preceding quarter.

Yet total M&A activity for the first six months of the year declined by 4 per cent, compared with the first half of 2013, falling to $19.7bn.

Despite a decline in M&A transactions in the first half of the year, fees from completed transactions totalled $110.9m, an increase of 3 per cent on the same period in 2013 and accounting for 29 per cent of the total Middle East investment banking fee pool.

Total Middle Eastern investment banking fees declined by 19 per cent in the first six months of the year, compared with the same period last year, recording a total of $375.9m.

However, fees increased significantly in the second quarter, compared with the same time last year, suggesting that despite a poor start to 2014, the market may be improving.

Investment banking fees reached $237.9m during the second quarter of 2014, marking a 72 per cent increase from the previous quarter.