UK property market continues to see interest from Middle East

on Mar 11, 2015
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Middle Eastern interest in the UK property market continues to remain high, despite the recent plunge in oil prices. HSBC Tower, the New Scotland Yard site and the Savoy Hotel – all of which are based in the UK’s capital city – are just three of the premium properties that have been snapped up in the last year by investors from the Middle East, according to international real estate firm JLL. The firm also reports that countries from the region are one of the most copious foreign investors and contributed a total of $4.5 billion to global real estate in the final months of 2014. Of this amount, in excess of $3bn was invested in properties based in London.

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However, while the UK market remains a vast area of interest for Middle Eastern buyers seeking to invest in property, many sovereign buyers are now looking to locations outside of the capital city in order to “rebalance their portfolios”, according to Fadi Moussalli, head of JLL’s International Capital Group, MENA. This could be due in part to competition from an influx of Chinese buyers who are also looking to make a real estate investments in London.
The lower oil prices are expected to continually drive the Middle East’s investment strategy, with further declines in the commodity creating the strong probability that global investments will slow down for the most part. David Green-Morgan, Global Capital Markets research director at JLL stated that while it is most likely that current commitments will be followed through, any investors with the intention of making new purchases will take great care in doing so. Oil prices fell in mid-2014 and the effect of this has been clearly seen in the investment intentions of Sovereign Wealth Funds and wealthy private buyers. Previous volatility in oil prices has seen Middle Eastern groups maintaining allocations, at varying levels, to global real estate.

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