Staff Report,
Dubai, UAE
Middle Eastern investors are forecasted to invest US$3.2 billion (Dh11.75 billion) into UK real estate in 2024, according to Select Property, a leading UK-based property developer and investment partner. The first half of 2023 saw as many as 411,000 GCC residents visiting the UK. An average of US$3,254 (Dh11,950) was spent by them, contributing US$1.2 billion (Dh4.41 billion) to the country’s economy.
Flight bookings from the Middle East to the UK are showing promising rise, standing at 93% of pre-pandemic levels, signifying that GCC interest in the UK extends beyond tourism. This is especially being seen with High-Net-Worth-Individuals (HNWIs) from the GCC who are increasingly shifting their focus to investing in UK real estate. A survey conducted by Rayan Bank, a London-based Shariah-compliant lender, revealed that in the last 12 months, 33 percent of the 151 investors with an average net worth of US$208 million (Dh 763.86 million) invested in this market to outperform any other major global hub.
The influx of GCC investors was further propelled by the weakening British pound, compared to major currencies such as the Saudi Riyal. Buyers can now reap more value for less money by investing in the outskirts of the UK as well as in prime locations such as Manchester and Birmingham. The cities show great potential in terms of sales growth and rental growth. Through 2027, Manchester is expected to see 19.3 percent and 21.6 percent in sales growth and rental growth, respectively. Birmingham will witness 19.2% in sales growth and 19.3% in rental growth.
Adam Price, CEO of Select Property, commented, “Data shows that rental enquiries have tripled in Manchester since 2019 with 30 enquiries per property and forecasted rental yields of 8% as the city’s population is currently growing at twice the rate of the national average – with a further 10% growth expected in the city centre by 2025. Birmingham rental yields are also promising at 6% with a bustling student population and five universities – most notably the University of Birmingham’s which boasts a student contingent of 19.5%. With demand for city-living constantly growing in urban centres such as these two locations, savvy GCC investors are capitalising on these up-and-coming areas due to the vast potential of ROI that they offer.”
The rise of affordable property and student accommodation are driving GCC investors to invest in these sectors. Reports of Bahrain planning to invest over US$1 billion (Dh3.67 billion) in the UK as part of a new trade deal emerged with manufacturing, real estate and financial services sectors being among the core focuses. From February 2024 onwards, several improvements will ease travel for GCC visitors, including a two-year visa, reduced costs, and unlimited visits. Consequently, Middle East investors are expected to significantly increase investment into the UK’s real estate sector.
According to Select Property, based on the current market dynamics, a buy-to-let strategy is recommended as a profitable approach.
Ends
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