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Wealthy GCC investors are leveraging weak pound to buy London properties

June 23, 2022
real estate

Knight Frank says there has been a noticeable surge in UK property interest, as Northacre, a subsidiary of Dubai-listed Shuaa Capital, announces its first luxury branded residence in London

Investors based in the GCC states are leveraging a weak pound to buy assets in the UK’s luxury property market after the sterling fell to its lowest against the dollar last week since March 2020.

Offers accepted in both prime central and outer London reached a 10-year high in May, according to Knight Frank.

With the education system being a big draw for buyers who want to educate their children in the UK, investors are taking advantage of the pound’s 10% fall against the dollar year-on-year, the global property consultant said.

Henry Faun, partner, head of private office, Knight Frank Middle East said: “The UK and specifically the central London market remains key in the portfolios of our Gulf-based clients. The weaker pound sterling combined with the ease of travel this year has assisted our high-net-worth clients with their acquisition decisions.”

In an earlier interview with Zawya, Faun said branded residences in London and New York were of particular interest to Gulf-based buyers this year.

And today, Dubai-listed Shuaa Capital announced that its subsidiary Northacre had teamed up with luxury hotel brand St Regis, to launch its first branded residence, No. 1 Palace Street, The St Regis Residences.

The building, formerly The Palace Hotel, which is being turned into 72 luxury apartments, is next to Buckingham Palace, the London residence of the Queen, and is expected to be completed this year.

Branded residences often involve a partnership with a luxury hotel brand, and frequently include hotel amenities and management, making them popular with wealthy foreign buyers who move between homes around the world.

Knight Frank said the longer-term trajectory is that prime central London will outperform most other UK markets over the next five years, with international buyers, including those from the Middle East, continuing to help accelerate the trend.

The UK’s commercial real-estate markets' investment volumes has reached £20.2 billion (AED 90.76 billion) in the year to date, 7% above volumes over the January–May period in 2020 and 8% higher than the same period in 2019, Knight Frank added.

Ashley Bayliss, partner, head of debt and mortgage advisory, Knight Frank Middle East, said: “UK interest rates have recently risen in-line with other international markets, however, the investment case for UK real estate remains compelling when considering both the continued potential for growth and current weakness in GBP.”

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