UK still the no.1 safe-haven investment location for wealthy GCC investors, as Qatari government declares it will invest “£5bn in the UK” over next 5 years.
- London and the rest of the UK remains the most popular offshore investment for wealthy property investors based in GCC states
- Brexit has created “the perfect opportunity” for investors buying in Middle Eastern currencies to “tap into the long-term potential of the UK market”
- Qatar’s Finance Minister also confirms his country will pour £5bn into the UK “over the next three to five years”
Confidence in the UK property market from GCC investors has never been higher.
That’s the message from several real estate experts based in the Middle East, who assert that Britain remains the most popular overseas investment destination for buyers in GCC states despite the prospect of Brexit and increased rates of stamp duty.
“We are still seeing strong demand for London from the GCC, and also into the outer areas for GCC investors driven by a search for higher yields,” explains Victoria Garrett, Partner at Knight Frank Middle East.
While London, as Garrett explains, is “still the number one destination for high-net-worth individuals looking to live, work and educate their children”, key regional cities and their significantly stronger investment returns are attracting those GCC buyers that are purely focused on investment.
Discussing the increased interest in these cities from international investors, Richard Bradstock, Director and Head of Middle East at international property investment firm IP Global, highlights Manchester as an example of where more Middle Eastern money is now heading in the UK.
He explains: “Manchester is one of the strongest property investment cities in the UK. Not only are 63% of households renting, which is 24% above the UK average, but in the extended city centre four out of five apartments are rented.”
Key to the continued preference for UK real estate has been the recent fall in the value of sterling against the US dollar following Brexit. GCC investors buying in currencies pegged to the greenback can now acquire British property with as much as 12% more affordability than they could have done just 12 months ago.
“With the results of the Brexit vote and the sharp fall of the pound, now is the perfect opportunity for dollar-pegged Middle East investors to tap into the long-term potential of the UK market,” says Bradstock. “We believe the ‘safe-haven’ element is likely to remain a permanent fixture for the UK market, as the exchange rate will bounce back in time, which is why this ‘Brexit discount’ is a short window of opportunity.”
These expert comments were also published on the same day that the Qatar government promised to invest heavily into the UK market over the next few years. Speaking on a visit to London, the country’s Finance Minister, Ali Sherif Al Emadi, promised that his country will “invest £5bn in the UK over the next three to five years”.
His comments were echoed by the Qatari Prime Minister, Sheikh Abdullah bin Nasser bin Khalifa Al Thani, who declared: “Qatar has great confidence in the UK, and this confidence will be demonstrated in the additional investments we will make over the next decade.”