London Tops Global Property Market for GCC Investment

Garrett Townsend — Wed, 08 Nov 2023 13:08:49 +0000

London is the top global destination for Gulf Cooperation Council (GCC) property investment despite market headwinds, according to a new report from the UK’s oldest and most successful Islamic Bank, Al Rayan Bank.

The 2023 GCC Investment Barometer, which surveyed 150 investors from Saudi Arabia, Qatar and the UAE with an average net worth of $208m, found that a third (33%) had bought property in London over the last 12 months, more than any other major global market.

The research also found those that invested in London over the period spent more, at an average of $90.8m, with Tokyo ($90.4m) and Zurich ($89.7m) the next highest.

Almost all (95%) of the respondents have invested in the UK property market over the last five years at an average value of $81.9m, according to the findings.

The research shows that almost nine in ten (89%) view the UK as a strong investment opportunity, with 85% saying their confidence in the market has increased over the last 12 months, citing surplus demand, reliable investment returns, strong rental growth and the availability of diverse assets.

Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, said, “UK property is the darling of GCC investor portfolios. London, in particular, is seen as a reliable location for safe returns.

“And despite a challenging period for the market, investors know they can rely on the UK’s stable currency, growing demand for housing, rising rental incomes, transparent legal system and its established network of skilled property professionals, which make buying and owning property in the UK a profitable and headache-free experience.

“This is an auspicious time for those with assets to deploy in the UK property market and coupled with those from the GCC considering Britain as a second home, I’d expect this trend to continue.”

Aneel Mussarat, Founder of MCR Property Group, added, “There is undoubtedly a bias towards the UK among GCC investors because of the long-standing relationships that exist with developers and agents across the market, the absence of any language barriers and the surplus demand and strong rental growth that we continue to see.

“London remains the primary focus, but investors are increasingly willing to look further afield. The regeneration that continues apace across the UK’s regions is creating more attractive investment opportunities for GCC investors, and we’re seeing this reflected in our own portfolio.”

The enduring appeal of the UK

The findings show that almost all (93%) of the respondents are planning to make new investments or increase their investments over the next five years, with many looking to invest across the UK’s regions.

Liverpool (34%), Manchester (34%), Birmingham (26%), Brighton (23%) and Newcastle (19%) are the top five destinations outside of London (56%), according to the research.

Of those planning to invest in London, more than half (55%) are targeting Central London, with East London (32%) the next most popular area.

The type of property respondents are planning to invest in within the UK is mixed, with 59% considering residential apartments, 52% looking at commercial office space and 49% seeking residential housing.

Sustainability is also a growing consideration for investors, with 58% of respondents stating access to green investments make London an attractive investment target.

Giles Cunningham, CEO at Al Rayan Bank, said, “The GCC barometer has unveiled an encouraging picture for the property market across the UK.

“Investors are also becoming more aware of the real estate opportunities across the regions, which are proving increasingly attractive as regeneration projects accelerate.

“Al Rayan Bank has huge experience arranging Sharia-compliant finance for real estate investors, and we stand ready to support investors with the right real estate financing solutions.”

Source : LondonLovesBusiness

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RIYADH: Middle Eastern investors are expected to pump $3.2 billion into the UK real estate market in 2024 to capitalize on its increasing affordability and a growing interest in the student accommodation sector, according to London-based Bank of London and The Middle East.

BLME said the financial strength of the Gulf Cooperation Council economies together with an appetite for assets diversification — as well as an interest in university related properties — are the main drivers fueling the anticipated investment.

The Shariah-compliant institution added that advisers and intermediaries who work with BLME predicted the purpose-built student accommodation asset class would see the most significant investment growth in 2023.

The longstanding affinity of Middle Eastern students with the UK’s schools and universities and the low rate of tenant failure make it an attractive prospect for speculators, stated the release.

“With a perfect storm of strong dollar-pegged GCC currencies, surplus cash following last year’s oil boom and falling UK asset prices, investors in the Middle East have a golden opportunity to spot a bargain while property prices are low,” said Andy Thomson, head of real estate finance and investments at BLME in a press statement.

In 2022, both Saudi Arabia and the UAE made the list of the top 10 countries outside the EU for students coming to study in the UK.

The inflation rate in the UK has caused domestic mortgages to hit the highest level since the global recession in 2008, leading to less demand, which could ultimately result in a fall in real estate prices.

The report further noted that London remains the most preferred destination for GCC investors in the UK, but they are also considering other cities such as Manchester, Birmingham, Newcastle and Bristol.

In January, a report released by real estate firm JLL confirmed that the appetite of Middle Eastern investors for global property markets is expected to grow amid global economic headwinds.

“The willingness of investors to take advantage of discounted buying opportunities will continue to emerge in the face of the uncertain economic outlook in Europe and the US and moderated competition in bidding,” said Fadi Moussalli, JLL’s executive director of International Capital Coverage at that time.

Source : ARABNEWS

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London Tops Global Property Market for GCC Investment

GCC Investors to Spend $3.2bn in UK Property Market in 2024: BLME