UAE investors look outside London for UK real estate

Report shows secondary cities of Manchester, Birmingham, Liverpool are popular
UAE investors look outside London for UK real estate
By Sarah Townsend
Sun 17 Sep 2017 11:40 AM

UAE investors are increasingly exploring the UK’s secondary cities for real estate opportunities, in addition to their core favourite, London, a report claims.

While the capital remains a firm favourite with UAE-based investors, they are also looking to other large UK cities including Manchester, Birmingham and Liverpool, International Property Investment (IP) Global’s latest twice-yearly Global Real Estate Outlook suggests.

These traditional secondary cities offer high rental yields and capital growth due to steadily growing economies and populations leading to rising house prices, IP Global’s report notes.

irmingham, the second largest city in the UK, “continues to thrive” due to its 20-year ‘Big City Plan’, which includes GBP1 billion of public sector investment to improve the city’s transport and digital infrastructure. The upshot of this is that rents have risen 24 percent in Birmingham City Centre in the past 12 months, the report says.

Further north, Manchester is becoming a popular choice for investors as property prices are low at present but forecast to rise by 28.2 percent from 2017 to 2021. Looking further afield, the report says European cities, such as Lisbon, Stockholm, Dusseldorf and Frankfurt feature are also emerging as attractive investment opportunities.

Hamburg, which has recently undergone the $15 billion HafenCity regeneration by the European Union (EU), has seen 70 percent growth in house prices since 2009, while financial hub Frankfurt has seen an uplift of 40 percent in house prices between 2009 and 2016.

The US’ third largest city, Chicago, is also seeing increased investor interest from the UAE, the report says. Here, house prices have risen by 36 percent in the last five years and rents by 10 percent since 2016.

The traditional investor haven of London is seeing increased investor in outer city areas as a result of the new Crossrail overground line being built. Property prices along some parts of the route are predicted to rise by up to 20 percent.

Richard Bradstock, Head of Middle East at IP Global, said: “In the Middle East we have experienced a shift in investor behaviour. London has always been a popular choice for overseas investors and today, factors like its chronic housing deficit and the government’s increased spending on infrastructure, mean that the city remains appealing as property prices continue to rise.

“Yet, UAE residents who are looking for more affordable options, with greater returns over a 5-10-year period, are now exploring regional cities and the commuter belt of London.

“Finally, outside of the UK, cities within Central and Western Europe are now thriving with the boom of entrepreneurship and the eruption of start-ups.”

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