By Staff writer
CBRE sees renewed interest from regional investors; to make up 25-30% of sales in prime residential sector
Gulf investment in London's prime residential real estate has spiked following the recent general election which saw David Cameron win an outright majority for the Conservatives, according to CBRE.
Its latest research paper said the post-election UK has seen renewed investor interest in London property, particularly from Middle Eastern investors.
CBRE said prior to the election, buyers from the Gulf region accounted for approximately 20 percent of the market for newly built residential property in prime central London.
Since then, the number of enquiries to CBRE offices from the region has risen and CBRE said it anticipates that regional buyers will soon account for up to 30 percent of sales post-election.
Safina Ahmad, head of GCC Residential Agency, CBRE, said: "London continues to remain the destination of choice for Middle Eastern investors, due to its quality infrastructure, stable political and legal framework and quality of life.
"The city has always attracted institutional commitments from the region but we are now increasingly seeing many individual buyers purchasing residential property, treating the city as a second home."
Jennet Siebrits, head of UK Residential Research, CBRE added: "Once the Conservative majority was announced, confidence returned to the market, and we have already seen a strong uptick in interest from the Middle East.
"The safe political and economic climate makes London continually attractive. London has long established itself as a financial hub, where many Middle Eastern buyers are confident to purchase, knowing their investment will be safe.
"We have also seen continued demand from many international buyers who use their London property as a base for their spouse or for children to stay as they are educated in the capital, meaning that purchasing a property, rather than a three to five year rental, is still much more appealing."
According to the report, activity in prime central London is set to return to previous levels as pent-up demand resurfaces. Prices in prime central London will grow by 7 percent in 2015, with total growth of 31 percent forecast over the next 5 years.
London is one of a handful of global cities that attracts the most affluent international buyers. As a result, London super-prime prices are second only to Hong Kong at around $7,500 per square foot.
The report noted that high net worth buyers from the Gulf are attracted to London for a number of reasons including the lifestyle, time zone, language, and ease of access.