Uk property lures middle east buyers on pound brexit slump _ gulfnews. com


London: Middle East investors, benefiting from a weak pound and rising oil prices, increased their spending in UK commercial property even as Brexit prompted buyers from every other region to shrink their spending.

Investors from the region accounted for 24 per cent of all overseas acquisitions in the fourth quarter compared with 10 per cent a year earlier, according to data compiled by fund manager Fidelity International.

“We have seen a really significant increase from our Middle Eastern clients in their appetite for London,” Stephen Clifton, head of central London at broker Knight Frank LLP, said in an interview.

Usd to inr exchange rate history “There are two key reasons for that: currency and stability.”

Office values in the City of London financial district fell the most in seven years after the vote to leave the European Union and property funds were forced to freeze redemptions as investors, fearing further price drops, rushed to withdraw money.

Values stabilised instead as sterling’s weakness gave buyers from countries including the United Arab Emirates and Qatar a 15 per cent currency discount after the referendum.

“The pound has taken an absolute battering,” Matthew Richardson, head of real estate research at Fidelity International, said in an interview. Exchange rate ksh to usd With the price of oil rising 62 per cent year-on-year, Middle Eastern investors who depend on petrodollars have been lured back to the UK, he said.

Kuwait’s St Martins unit bought More London, a group of properties next to Tower Bridge, for about 1.7 billion pounds in 2013 and Abu Dhabi Investment Corp. Gender roles in society today is developing apartments on Grosvenor Square in Mayfair.

As crude fell in price and property values reached record highs in London in 2015, investment from the region slowed for six successive quarters, the Fidelity data shows. Exchange rate usd eur Now they’re back with investment rising 83 per cent year-on-year to £1.6 billion in the fourth quarter, the asset manager said.

Deals in the period included the acquisition of The Peak office building in the Victoria district, 5 King William Street in the City of London and a property opposite the Ritz hotel in the Mayfair district, Fidelity said.

While the collapse of the pound has also benefited Asia Pacific buyers, a crackdown by the Chinese government on outbound capital flows has helped Middle Eastern buyers regain market share, according to Richardson. Convert cad to usd Many investors from the region also have long standing relationships with the UK and its education and legal systems which provides a sense of stability, he said.

As well as currency discounts, London real estate is luring buyers after becoming more affordable compared to other major European markets. Gender inequality research paper Prime office yields are 3 per cent in Paris and 3.5 per cent in Berlin compared with 4.25 per cent in the City of London financial district, according to Knight Frank.

“These are investors who know London well and it means you can pick up these assets a lot cheaper than historically,” said Andy Pyle, head of UK real estate at KPMG LLP.

The election of Donald Trump has also raised the prospect that London will regain its crown as the top global destination for Middle Eastern investors. Pound dollar exchange rate today The UK capital was surpassed by New York for spending from the region in the 18 months through June 2016, according to a report by broker CBRE Group Inc.

“There are concerns in relation to America now, in their inward focus and restrictions on who they allow in,” Clifton said. How does the oil futures market work “That’s a further attraction of London.”