The UK’s pound has clawed back some of its value since the whirlwind stint of Liz Truss as Prime Minister last year, removing some of the “discount” on the country’s real estate for dollar-pegged GCC buyers.
But as the UK continues its post-pandemic recovery, its real estate still retains its attraction for GCC investors, said Amit Seth, Managing Director of Qima Real Estate.
Political stable, with hubs such as London’s Silicon Roundabout and Cambridge as well as a diverse economy including a strong tech sector, the country is also home to some of the world’s leading universities, which are further draws for regional real-estate buyers, said Seth.
Qima, which means ‘value’ in Arabic, was launched to specialise in selling UK real estate to regional investors, with an office in Dubai. Seth is banking on current business conditions such as the still-weak pound.
“At the time when the pound was at its lowest level, in September 2022, GCC investors were saving approximately 21% on any investment,” he said. “Currently, we are still looking at approximately 10% savings based on the current foreign exchange rates.”
He added: “Of course, the UK is still in recovery since the pandemic, and the investment levels have not reached those of 2019, pre-pandemic. However, the levels of investment have increased since the end of the pandemic, and this applies to Europe in general, especially the UK, Germany, and France.”
These countries continue to attract the bulk of foreign direct investment (FDI) and retain the top three spots, he added.
Rents increased by an average of 6% in 2022 in the UK, Seth said, and is forecasted to continue increasing at the rates of 5% in 2023 and 4% in 2024.
“At present, the average rental yield in the North is 7.4%, whilst the average yield in the South is 5.2%,” he added.
Seth said his firm plans to capitalise on the close relationship between the UK and GCC, which records £45 billion ($55.55 billion) in trade per year, and the fact that GCC investors value the good returns from the UK real-estate market.
Sovereign wealth funds from the region have over $2 trillion invested in the UK, primarily in real estate, which is predicted to grow, he added.
(Writing by Imogen Lillywhite email@example.com ; editing by Seban Scaria)