MENAFN - Khaleej Times
ME investors show interest in London property market
(MENAFN - Khaleej Times) Interest in London property is very strong at the moment, as more investors are looking towards trusted and stable investments in one of the international financial centers of the world, a top official of Berkeley Homes (Capital) said.
The number of UAE investors buying second homes in London continues to increase due to increased connectivity through frequent flights to the United Kingdom's capital and other cities from the emirates.
"Education has been a major pull factor to attract Middle East investors. We receive a lot of interest from parents wanting to buy their children student accommodation for when they attend a London-based university," Piers Clanford, managing director of Berkeley Homes (Capital) Plc, told Khaleej Times during an interview on the sidelines of three-day London Collection Exhibition Today, which concluded on Tuesday.
Berkeley Homes (Capital), part of the Berkeley Group Holdings plc, London's leading residential developer, brought three of the company's most prestigious residential developments - One Tower Bridge, Goodman's Fields and Saffron Square - to the UAE.
The UAE has a long history of purchasing property in London and since 2009 buyers from the UAE accounted 1.8 per cent of total sales in London for properties over ?1 million. According to Knight Frank, the UAE ranked ninth in the list of nationalities purchasing property in London whilst Middle Eastern buyers accounted for 8.3 per cent of total new build purchases in London between September 2011 and August 2012.
"St James Homes and Property Development Group-originally a joint-venture between Berkeley Group and Thames Water and now a fully owned brand of the Berkeley Group-exhibited in the UAE six months ago. St James' exhibition was extremely successful, and with the increased interest from the Middle East that we've seen over the last couple of years, we believe the time is right to deliver our first exhibition in the UAE," Clanford said. The London property market remains a 'safe haven' for international capital in uncertain economic times. Domestic and international buyer demand for property in these areas continues to increase year on year from both owner-occupiers and investors.
"What the financial crisis has taught investors is to be more risk adverse by broadening their investment portfolio. Therefore, instead of investing solely in local markets more investors are looking to buy property in other markets around the world. London is a prime target amongst the cities of the world for property investment," he said.
Elaborating, he said a number of reasons define the pull factors that make London a prime market for a property investor; such as, investor stability due to the lack of available stock and a strong rental market. He said the property investment market in London is currently very positive, with increased foreign investment happening on a yearly basis.
"From the Middle East, which has been reflected in the first two days of our exhibition in Abu Dhabi, the majority of interest we've seen has come from private individual buyers. We also received a good feedback from the three-day exhibition in Dubai as the people show interests in the three projects," he said.
"What has been interesting to witness is the amount of local investors who have shown great attention in the Saffron Square development; the lowest priced apartments in our UAE exhibition. We deliberately chose to exhibit three property developments that provide a full range in price: there are apartments within Saffron Square that can be bought at ?190 000, whereas the most expensive purchase in the One Tower Bridge development costs ?20 million.
"Traditionally Middle East investors are renowned for their top-end purchases, however, what we have begun to see through our exhibition is investment in lower-end properties as well," he said.
He said investment from the Middle East in London property has been gradually increasing over the last couple of years.
"We will continue to increase our presence on the ground over the next few years if we continue to witness such great success," he said. Since early 2009, average house prices across London increased by 25.9 per cent and are predicted to increase by as much as 7.2 per cent by 2015. In Prime Central London average house prices are expected to increase by 10.2 per cent during the same period, underpinned by significant sales to international buyers, according to Knight Frank's UK Housing Market Forecast.
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