(MENAFN - The Peninsula) By Satish Kanady I The Peninsula
With speculation continuing around a potential 'Hard Brexit or 'no Brexit, Middle East's Ultra High Net Worth investors are continuing to pour billions into the UK's real estate market. The region's UHNWIs poured an estimated $3.3bn into London's real estate market in 2018. It may be noted that Qatar is one of the top real estate investors from the Middle East in the UK.
In an environment where investors continue to hunt for yields whilst also balancing portfolio risks due to uncertainties, Middle East investors continue to seek assets in London due to its safe-haven status.
This was evidenced in Knight Frank's Wealth Report 2019 which found that UHNWIs from the region allocated $3.3bn 2018 to property in London, despite concerns around Brexit, taking advantage of a favourable currency environment with strengthening dollar-pegged exchange rates against a weakening sterling, Andrew Jones (pictured), International Sales Director for Battersea Power Station Development Company (BPSDC), UK told The Peninsula.
He said there are good reasons to believe that London will retain its status as a leading global city, financial hub and property investment destination. Its strong fundamentals mean that the London remains Europe's number one tech hub for unicorn companies and attracted more foreign direct investment than any other city in 2018, as the latest data compiled by London & Partners found.
The latest research by technology and investment advisory firm, GP Bullhound, also showed that London's technology ecosystem has helped 17 companies surpass the $1bn valuation mark since 2010, over double the amount of other major tech cities such as Berlin (7) and Paris (4).
Jones vouched that Brexit is not dampening the market sentiments in London. Sharing Battersea's experience he commented: 'Back in 2012 we began one of the world's largest redevelopment projects with Battersea Power Station, one of London's most iconic landmarks which lay idle for three decades. This £9 billion project will create a new town centre for London on the banks of the River Thames, a short walk from Chelsea and a mile away from the traditional 'golden triangle of Mayfair,
Belgravia and Knightsbridge. As the largest regeneration project in Europe, we have seen high levels of interest from the Middle East investors and have sold in excess of £125m of residential property in the past year with, alongside British buyers, a significant proportion going to Gulf investors despite ongoing uncertainties surrounding Brexit.
The Middle East is an important market, given that Knight Frank's most recent wealth report projects that the number of Ultra High Net Worth Individuals (those with wealth over $30m) in the region is expected to grow by 20 percent by 2023.
Given that the region has a very large expatriate community, many of them also seek relocation opportunities and the research found that 24 percent of them are seeking emigration with the UK being the most preferred destination.
In the Middle East, 74 percent of UHNWIs own a second home abroad, according to Knight Frank, higher than any other region in the world. Additionally, 55 percent of them are also looking to make foreign investments, with the UK real estate still the top choice.
As Middle East investors continue to look for the best opportunities abroad and real estate remains one of their more preferred asset classes, they will be aware that London's attractive fundamentals are not going to change regardless of whatever happens with Brexit.
Hence, it is a city, which will remain a top choice for regional investors; whether they look at it as a second home, an investment or an asset that will serve their kids as they pursue professional and educational opportunities.
Britain is home to £38.5bn worth of Qatari investments, the Lord Mayor of the City of London has revealed during his recent visit to Qatar. Charles Bowman also acts as a global ambassador for the UK's financial and professional services industry, explained that the figure of £35bn has been boosted by a recent injection of £3.5bn, representing 70 per cent of new investment in Britain, which is estimated at £5bn.
Trade between Qatar and the United Kingdom last year was valued at about $3bn, and it is growing. According to data vailable on public domain, nearly 80 British companies and 672 Qatari-British companies are operating in Qatar.