Dubai — Post-election UK has seen renewed investor interest in London’s prime residential real estate, particularly from the Middle Eastern buyers who are expected to account for 25 to 30 per cent of home sales, property consultant CBRE said.
Prior to the election, buyers from the Gulf region accounted for approximately 20 per cent of the market for newly built residential property in prime central London, CBRE said in its latest report.
Safina Ahmad, head of GCC Residential Agency, CBRE, said London continues to remain the destination of choice for Middle Eastern investors, due to its quality infrastructure, stable political and legal framework and quality of life.
“The city has always attracted institutional commitments from the region but we are now increasingly seeing many individual buyers purchasing residential property, treating the city as a second home.”
According to an earlier CBRE report, Middle Eastern investors are among top real estate investors globally, especially in the UK. They spent about $14 billion in international real estate investments last year, becoming the third largest spender globally.
“As the UK went to the polls there was some uncertainty as to the outcome, with a hung parliament looking likely. This had a direct impact on property transaction levels in Prime Central London in the months leading up to the election,” said Jennet Siebrits, head of UK Residential Research, CBRE.
“Once the Conservative majority was announced, confidence returned to the market, and we have already seen a strong uptick in interest from the Middle East. The safe political and economic climate makes London continually attractive,” said Siebrits.
“London has long established itself as a financial hub, where many Middle Eastern buyers are confident to purchase, knowing their investment will be safe. We have also seen continued demand from many international buyers who use their London property as a base for their spouse or for children to stay as they are educated in the capital, meaning that purchasing a property, rather than a three to five year rental, is still much more appealing,” Siebrits added.
According to the report, activity in prime central London is set to return to previous levels as pent-up demand resurfaces. Prices in prime central London will grow by seven per cent in 2015, with total growth of 31 per cent forecast over the next 5 years.
London is one of a handful of global cities that attracts the most affluent international buyers. As a result, London super-prime prices are second only to Hong Kong at around $7,500 per sq ft. This follows average annual growth of around 10 per cent over the past decade, stated the report.
However, in the run up to the election activity in the prime London markets slowed off with sales down around 25 per cent in the first quarter of the year and price growth down from its peak of 19.3 per cent in mid-2014 to nearer 8 per cent. In the week following the election there was a 25 per cent jump in viewing enquires in CBRE’s West End office.
The report noted that high net worth buyers are attracted to London for a number of reasons including the lifestyle, time zone, language, and ease of access. However, the most important drivers remain the strength of the local economy; London is arguably the global preeminent financial centre, which continues to attract global companies.
Events to be staged at the DWTC, comprising diverse sectors including construction, energy, technology, beauty, food, healthcare, environment and automotive, will mark the emirate’s post-pandemic economic recovery
Local business8 months ago