Some 33% of GCC High Net Worth Individuals (HNWI) invested in UK’s real estate in the last 12 months, said Select Property, a leading UK-based property developer and investment partner.

 

Moreover, Middle Eastern investors are forecast to invest $3.2 billion into UK real estate in 2024. According to Adam Price, CEO of Select Property, tourists from the Gulf Cooperation Council (GCC) have largely contributed to this projection by realising the vast potential of UK property as an investment vehicle for diversification.

 

Through the first half of 2023, 411,000 GCC residents visited the UK; on average, these tourists spent $3,254, contributing $1.2 billion to the country’s economy. While flight bookings from the Middle East to the UK are at about 93% of pre-pandemic levels, GCC interest in the UK extends beyond tourism. This is especially being seen with High-Net-Worth-Individuals (HNWIs) from the GCC who are increasingly shifting their focus to investing in UK real estate; in the last 12 months, a survey of 151 investors with an average net worth of $208 million found that 33% of this demographic invested in this market to outperform any other major global hub.

 

Fluctuating pound

With the British pound fluctuating and currently being relatively weak when compared to other major currencies such as the Saudi Riyal, this further enhances the appeal of UK property investments for GCC investors as they can capitalise on more value for less money. 

 

While cash buyers are flocking to the outskirts of the UK to snatch investment properties, Manchester and Birmingham continue to hold great promise; through 2027, the former is expected to see 19.3% in sales growth and 21.6% in rental growth while the latter will witness 19.2% in sales growth and 19.3% in rental growth.

 

Price commented: “Data shows that rental enquiries have tripled in Manchester since 2019 with 30 enquiries per property and forecasted rental yields of 8% as the city’s population is currently growing at twice the rate of the national average - with a further 10% growth expected in the city centre by 2025. 

 

Rental yields

“Birmingham rental yields are also promising at 6% with a bustling student population and five universities - most notably the University of Birmingham’s which boasts a student contingent of 19.5%. With demand for city-living constantly growing in urban centres such as these two locations, savvy GCC investors are capitalising on these up-and-coming areas due to the vast potential of ROI that they offer.”

 

Increasing affordability and a growing interest in the student accommodation sector are driving the promising 2024 outlook for GCC investors eyeing the UK real estate sector. Earlier this year, reports of Bahrain planning to invest over $1 billion in the UK as part of a new trade deal emerged with manufacturing, real estate and financial services sectors being among the core focuses. 

With a UK Electronic Travel Authorisation (ETA) scheme coming into effect in February 2024 - several improvements will ease travel for GCC visitors, including a two-year visa, reduced costs, and unlimited visits - Middle East investors are expected to significantly increase investment into the UK’s real estate sector.

 

While there is no one-size-fits-all solution for investing in real estate, given current market dynamics, Select Property recommends a buy-to-let strategy as a profitable approach.--TradeArabia News Service