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Rise in overseas investors buying post-Brexit UK property

Rise in overseas investors buying post-Brexit UK property

Buyers in the Middle East and Asia are moving to add more British real estate to their portfolios, triggered by a “Brexit window of opportunity”.

Summary:

  • UK property agents are reporting uplifts in enquiries and purchases from international investors following the result of the EU referendum
  • Private and corporate investors from the Middle East and Asia have realised the immediate currency opportunity that Brexit has created
  • With property fundamentals unchanged, investors have identified the need to act now to secure strong long-term growth

Has UK property just got even more attractive to the global investor community?

Huge numbers of agents in London and across the UK are reporting rising interest and transaction volumes for British real estate following the country’s vote to leave the European Union (EU) on June 23rd.

Last week (July 26th) a consortium of UK and Saudi Arabia based investors bid $1.3 billion for London’s Grosvenor House hotel in a move that made international headlines.

Speaking to the Financial Times, the managing director of the UK family office that submitted the offer says that there was increased urgency to push through the bid to allow the Saudi proportion of the consortium to benefit from the “Brexit window of opportunity”.

Private and corporate investors from around the world are looking to capitalise on a currency opportunity unlike many have ever seen before with British real estate.

Investors from the Middle East has long been enamoured with UK property, and the appeal of British bricks and mortar has become more pronounced since that it has just got as much as 12% cheaper for those dealing in dollar-pegged currencies. Jassim Alseddiqi, Chief Executive of Abu Dhabi Financial Group, stated that there is a “huge demand now among Gulf Cooperation Council (GCC)” investors in particular.

One fund manager in London was quoted as saying: “The Kuwaitis are calling up, asking to get more exposure. They haven’t seen sterling this low in decades.”

Other agencies have also reported a distinct rise in sentiment among Chinese investors now that UK property just got even more appealing for strategic, long-term investors around the world.

While the future capital growth projections make acquiring assets now such a strong investment prospect, it’s important that investors focus on yields to drive returns in the short and mid-term as the UK negotiates its way out of the EU.

The UK’s largest estate agent has already reported a slowdown in London transaction volumes, due in part to many investors looking at key regional cities such as Manchester, home to the UK’s highest yields and one of the biggest undersupplies of rental property.

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