Ishrath Jaigirdar,
Dubai, UAE
GCC investors spent a total of US$2.35 billion (Dh8.63 billion) in luxury property in the UK in 2022 and 2023. Decline in property prices, global inflationary pressures, supply-chain disruption, and interest rate rises are expected to further propel the GCC investment in the region’s real estate market to US$3.2 billion (Dh11.75 billion) in 2024, based on a report by Select Property, a leading UK-based property developer and investment partner.
GCC investors contributed to a 10 percent uptick in the number of billionaires that were buying high-end properties in London. Commenting on the growth, Henry Faun, Head of Knight Frank’s Private Office in the Middle East, said, “The UK’s leading legal system, the education on offer and ease of language and travel from the Gulf to London ensures that the it remains a sought after destination for capital from the Gulf. Currently, London residential prices are the lowest they have been since 2014 so it offers real value for investors at the moment.”
He further explained, “The newly enacted visa-free travel for GGC nationals under the Electronic Travel Authorisation now allows for very convenient repeat visits under a single approval,” encouraging more investors to diversify their portfolios in the UK.
As many as 54 homes priced upwards of US$19 million (Dh69.79 million) and collectively worth over US$1.65 billion (Dh6.06 billion) were bought last year, up from 49 homes that equated to more than US$1.3 billion (Dh4.77 billion) in 2022. These 103 purchases resulted in an approximate value of US$2.35 billion (Dh8.63 billion) over the past two years to reinforce London’s strength as a major global real estate market for owner-occupier and trophy asset purchases. The capital alone is not the focus of international buyers since other regional cities are also garnering increased attention lately due to their ability to offer higher returns on investment.
A strong growth in Manchester, Sheffield, and Birmingham is forecasted, attributable to the GCC investment. Through 2027, Manchester and Birmingham are expected to experience annual sales and rental growth of 19 percent. As the UK’s second-fastest-growing city economy, Sheffield is being viewed as a sleeper investment which yields the potential for explosive growth down the road; property prices remain affordable while presenting an opportune moment for investors to capitalise on long-term gains. The city’s Velocity Tower is viewed as a notable investment opportunity among GCC buyers.
Adam Price, CEO of Select Property, said, “London has demonstrated a proven ability to consistently remain among the most sought-after cities for real estate investment whilst competing with the likes of key global destinations such as New York. However, savvy investors, especially from the GCC, are exploring lesser-known areas due to their attractive long-term potential. With many GCC residents desiring residences across multiple geographies, emerging hotspots such as Sheffield are gaining traction. As the global economy remains unstable, and the British pound (GBP) remains relatively weak compared to GCC currencies like the Saudi Riyal, intelligent investors are pursuing investment opportunities in these markets to capitalise on the exchange rate, seeking more value for less money.”
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Also read: GCC investors expected to invest US$3.2b in UK real estate
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