GCC investments in the property market in London are seeing major changes, with many of the investors of late preferring to take the ‘syndicate’ or ‘club’ routes to pool funds for investments, industry insiders said.
Wealthy investors from the GCC region are purchasing properties in plush London localities in their children’s names, as part of their intergenerational wealth management process is another major trend change seen in recent times.
“Many of our overseas clients have seen this [the prevailing weak Sterling-linked subdued price conditions] as a good moment for their children to get onto the property ladder with current discounted prices,” Andrew Weir, chief executive at London Central Portfolio (LCP), a prime real estate agency, told Arabian Business.
“Of late, we have acted for a number of Middle Eastern clients using real estate as a means of intergenerational wealth management and long-term wealth preservation,” Weir said.
Industry experts said the trend is catching up fast with many GCC investors in view of expectations of huge upside to such investments in future.
On the new preference for pooled investments, industry executives said this was part of GCC investors’ strategy to diversify ownership.
Weir said this [‘syndicate’ or club’ routes] have become a popular alternative for investors from the Middle East.
“We are currently searching for a portfolio of investment properties for a group of six investors from the Middle East,” he said.
Industry insiders also said there was a major upswing in GCC investments in the property market in London in recent weeks, riding on the price discounts on account of continued weakness in Sterling against US dollar.
The high levels of tenant demand and rising rents is expected to further push up GCC investments, as also the apartment sales market, in 2023, industry experts said.
Softer pricing, an effective ‘second’ discount for dollar-denominated buyers purchasing property in London makes prices effectively 22.4 percent lower when compared with peak values back in 2015, they said.
Weir also said their agency has seen an increase in interest from dollar-denominated buyers including buyers from the Middle East.
“They see PCL (Prime Central London) residential real estate as providing stability and strong historic capital appreciation but also view pricing as being at an attractive low point in the current cycle,” he said.
Bayswater, a residential area within PCL, is among the most popular areas with buyers from the GCC region, on account of its huge capital growth potential.
Close to Hyde Park, with its convenient central London location and the ongoing redevelopment of Queensway, it is also popular with tenants and now viewed as an investment hotspot.
Average apartment prices in Bayswater are currently around 6.5 percent below the peak seen in 2015.
Despite a constantly changing global environment, London real estate is still viewed as a safe haven investment by investors from the Middle East.
London is considered convenient for business and education, with those running a global enterprise from London benefitting from GMT time zone by being able to trade with Asia in the morning, the Americas in the afternoon and continental Europe all day.
The wide array of interconnected professional services available also makes London a convenient centre from which to run a business.
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