London remains top ‘hotspot’ for GCC property investors, says Cluttons

The Cluttons report was released to coincide with the launch of a new phase at Paddington Gardens by Bahraini developer Meritas Real Estate.

A luxury apartment at Beaufort Street, Chelsea. Price: £1.6 million. - Supplied photo

Abdul Basit

Dubai – London remains the most preferred destination and ‘hotspot’ among Gulf investors for buying a second home, beating New York, Hong Kong and Shanghai, revealed the latest study by Cluttons. The primary factors cited being the high-quality infrastructure, cosmopolitan lifestyle and good return on investment despite the current political-economic situation, according to the report titled: “Middle East Private Capital Survey”.

More than a fifth of real estate investors from the GCC say the UK is their preferred destination for international investment, and almost half (49 per cent) plan to buy a London property in 2018, according to the survey.

“Despite Brexit, London’s position as an investment magnet appears to be unchallenged. The city is perhaps more Brexit proof than we give it credit for,” Faisal Durrani, Head of Research, Cluttons.

The report says the UK has historically been a beacon for Middle East investors, with the region’s strong political and trading ties with the UK underpinning health cross-border investment activity. London in particular is key investment hotspot for the Middle East’s wealthy, who account for 15-20% of all international residential property transactions in the capital.

A total of 22 per cent of 250 investors based in the GCC – including the UAE, Saudi Arabia, Kuwait, Bahrain, Oman and Qatar – chose the UK as their top investment destination in Cluttons’ study. Of those, 38 per cent chose London as their preferred UK investment location, followed by Manchester at 25 per cent, Birmingham at 16 per cent, and Scotland at 13 per cent, the report said.

The GCC states together represent a significant source of global capital outflows. According to the World Wealth Report for 2017 by Capgemini, the Middle East is home to 642,800 high net worth individuals. The wealth held by this cohort rose by 5% to US$2.42 trillion last year.

Fulham: Chelsea Vista, The Boulevard, Price: £2.35 million.

The report further reveals that there are top five neighbourhoods in London where Middle East property investors are interested in investing for their second home. The report says within London, the upmarket borough of Chelsea attracted the highest proportion of GCC real estate investors to the capital (29 per cent), followed by Fulham (15 per cent). Hyde Park, Covent Garden and Soho, and Clerkenwell were also among the top five London neighbourhoods for property investors from the region.

Paddington Gardens

The Cluttons report was released to coincide with the launch of a new phase at Paddington Gardens. The scheme is being developed by Meritas Real Estate with Bahrain-based Ahli United Bank.

Designed by Assael Architects and Powell Dobson, it comprises four buildings set around an acre of gardens with 335 homes plus offices, restaurants, retail space, a primary school and 340-room hotel.

Paddington Gardens

A spokesperson for Meritas Real Estate said: “The two-bedroom apartments have proved to be really popular among Middle Eastern purchasers at the development, the majority of which are looking for a London home for when they visit.

Paddington Station Crossrail link is scheduled to open in 2018, reducing journey times to Bond Street in central London from 15 minutes to 3 minutes. Crossrail has boosted property prices in Paddington and supported long-term growth in the area. Real estate prices around Crossrail stations are rising by an average of 31 per cent over the wider property market, according to separate research from CBRE.