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GCC investments in UK real estate are set to bounce back

July 13, 2022
real estate

Regions away from London offer higher yields, says BLME

As the global economy is buffeted by inflationary pressures, supply-chain disruption and interest rate rises, investments in the UK by GCC nationals, who view UK property as a ‘safe haven’ for their capital, are set to grow, according to a new report.

The Bank of London and The Middle East (BLME), an independent Shariah-compliant bank based in London, said there exists a 'clear opportunity for GCC investors to unleash the post-pandemic potential of property assets across the United Kingdom, with regional markets’ growth now outpacing London’s.'

BLME noted that investors concerned with wealth preservation should focus their attention on London, despite lower potential yield and capital appreciation, as the city is viewed as a ‘safe’ investment bet.

However, investors looking for higher yield potential could look at regions away from the capital. 'For example, prime City of London office yields are currently at 3.75 percent, whereas their equivalent in the regions is 4.75 percent,' the bank said.

A report by property consultancy Knight Frank in May said Gulf-based high-net-worth families have been returning to property investments in recent months as the real-estate market recovered from the worst effects of the COVID-19 pandemic.

More recently, it said that GCC investors are leveraging a weak pound to buy assets in the UK’s luxury property market after the sterling fell in early June to its lowest against the dollar since March 2020.

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