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Thu 17 Mar 2016 12:15 PM

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UAE’s wealthiest property investors favour London, New York

Cluttons/YouGov shows majority of UAE HNWIs expect to buy overseas real estate in 2016

UAE’s wealthiest property investors favour London, New York

More than 61 percent of the UAE’s wealthiest individuals expect to make overseas property investments this year, with London and New York the preferred locations, a report has concluded.

Joint research by real estate consultancy Cluttons and YouGov found that investment appetite among UAE high net worth individuals (HNWIs) remains high despite global economic volatility over the past year.

Well over half said they would likely invest in their top target city during 2016 – the report showed that London, an established centre for Middle East real estate investment, ranked alongside New York as the top investment location outside the region. UAE HNWIs are targeting 46 locations globally, the report said, without listing all of them.

Around half (53 percent) of respondents said locations within the Middle East were among their top three investment targets over the next 12 months. Dubai was the preferred location within the Middle East, with 30 percent of respondents naming is among their top three, followed by Abu Dhabi with 23 percent.

In terms of types of asset class across all intended destinations, 50 percent of respondents said they expect to target residential property; 22 percent favour the commercial sector and 28 percent expect to target a mixture of both.

Of the commercial investments, UAE HNWIs expect to focus on retail and office investments. Outside the Middle East, industrial and hotel investments are less favoured, the report noted.

Steven Morgan, chief executive of Cluttons Middle East, said: “With investment safety front of mind for HNWIs, London is just ahead of New York as the most preferred city for investment.

“However, our survey shows that New York appears more frequently in investors’ top three preferred cities for investment in 2016.”

Morgan said strength of the US dollar has contributed to strong appetite among UAE HNWIs for global property investments, particularly as global economic conditions remain “fragile” the report said.

It noted that economic slowdown in China, unresolved debt situations in the European Union (EU) and the prospect of a UK exit from the EU may threaten investment security in the coming months.

The report said: “A potential Brexit remains the biggest single threat to our forecasts, with some UAE HNWI investors acknowledging the potential negative impact this may have on the UK economy.”

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