Gulf investors continue to look at UK property

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Will Prime Minister Boris Johnson’s roadmap for exiting lockdown see a flurry of Gulf real estate investors return to the United Kingdom?

In spite of international economic turmoil, British real estate companies actually reported a noticeable increase in interest from buyers in June and July 2020. However, travel restrictions nevertheless mean the UK witnessed its lowest level of real estate investment since 2010, with a total of GBP32 million in the second quarter of 2020.

Real estate firm Knight Frank estimates that the total year-end transaction volume of Middle East capital into the UK was around GBP1.4 billion in 2020, a decrease of around six per cent on 2019.

STRONG RECOVERY AHEAD?

Boris Johnson’s roadmap for exiting lockdown does not have a firm date for foreign travel to and from the UK, but once these restrictions are lifted, Middle Eastern investment can resume.

Knight Frank expects the market to rebound significantly in 2021—perhaps by as much as 14 per cent. The continued interest in UK real estate despite the pandemic is testament to the enormous potential this market has for recovery.

Among the many real estate projects in the UK to have benefited from Middle Eastern backing is the London Resort, a proposed theme park based on British media properties and backed by Kuwaiti investment. It is currently slated to begin construction in 2022.

SIGNS OF LIFE

March saw Cordatus Real Estate and JISR Holdings launch a new partnership designed to provide easy access to the UK market, source opportunities and help manage the assets of Middle East-based investors.

Recognizing consistent high confidence in the UK among Middle Eastern investors, it anticipates acquisitions to be between GBP10 million and GBP50 million across office, industrial, retail and residential real estate.

It speaks to the huge opportunities presented to Middle Eastern investors by the UK real estate landscape, even during the COVID-19 economic downturn.

Once lockdowns are relieved and global travel possible, investors are expected to flock to the UK in greater numbers.

 

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