By Staff writer
New Cluttons report says high net worth individuals from region will continue real estate spending overseas for remainder of 2016
GCC-based high net worth individuals are set to continue investing in global real estate for the remainder of the year, with 63 percent claiming that they are likely to invest in their most preferred real estate investment location during 2016, according to Cluttons.
The third instalment of Cluttons’ 2016 Middle East Private Capital Survey showed that London, New York and Singapore are the destinations of choice - outside of the Middle East - for the region’s wealthy.
According to Cluttons, London has emerged as the favourite global property investment destination among respondents, with 11 percent naming the British capital as their most preferred city for investment.
In the first quarter of 2016, Middle East investors pumped $418 million into London’s commercial real estate, accounting for 7 percent of total investment during that period. This adds to the $5 billion invested by Middle East commercial investors in the city throughout 2015.
Steven Morgan, senior partner at Cluttons, said: “For the Gulf states as a whole, the oil price collapse that began in mid-2014 has certainly put government budgets under pressure. This has also triggered a series of macro policy amendments, aimed at tackling the projected budget shortfalls.
"However, from an investment perspective, sentiment remains positive amongst high net worth individuals who are targeting real estate in London, New York and Singapore in particular. These locations offer investors a variety of asset classes that command high capital value gains and high rental returns.”
On the residential front, Canary Wharf, South Kensington and South Bank were named as the top preferred London investment hotspots by respondents.
With Brexit, an instant currency discount of 12-13 percent has opened up, which is attracting buyers from the Gulf, especially to markets such as Belgravia and Chelsea, said Cluttons.