Gulf-based high-net-worth families have been returning to property investments in the last six months as the real-estate market recovers from the worst effects of the COVID-19 pandemic, according to Knight Frank.
London remains the favourite market, though France, Spain and Italy have also attracted interest in recent months, with investor sentiment driven by buoyant oil prices and improved outlooks for GCC banks, according to Henry Faun, partner at Knight Frank’s Middle East private office.
The US markets of Boston and Manhattan, New York, are also of interest to GCC families, many of whom may be seeking a home in either of these locations while their children are studying in one of the cities’ prestigious universities, he said.
However, the interest in Asian markets, including Singapore and Hong Kong, has not yet returned since the pandemic broke. Though local markets, particularly Singapore, are buoyant thanks to a number of new launches, continued travel restrictions have kept Gulf Arabs away, said Faun.
Data gathered by Knight Frank indicates the importance of free travel without restrictions to the international property market.
“A trend by which we can track is the arrival figures at Heathrow Airport, which we can check against prices. And they do tend, within reason, to track each other,” said Faun. “If prices cooled off in London, that was at a time of lockdown or significant reduction in terms of flight paths and access.”
The real-estate firm’s research shows that annual house prices in Prime Central London (PCL) was 5 percent down year-on-year in May 2020, as arrivals at London’s Heathrow Airport dwindled to zero, and saw an annual increase of over 7 percent by November 2021 as arrivals reached 3 million.
Faun said the current sentiment from GCC buyers is the best he has seen in two years, the upward trend beginning around six months ago with the easing of the majority of restrictions (except in markets to the East, such as Asia).
Company data show that new instructions from buyers for the UK market are now higher than they were in the first quarter of 2019, with GCC buyers eager to invest capital not deployed during the pandemic.
Branded residences, such as luxury apartments in New York’s Waldorf Astoria and London’s The Whiteley, have proved popular with Gulf investors in recent weeks, said Faun, but on the commercial side, they are looking for properties that can give them longer-term income for eight to ten years. Data centres are of particular interest, he added, and investment opportunities are growing as demand increases globally.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)