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London, New York and Dubai identified as preferred investment destinations
UAE, 17 March, 2016: Despite global economic volatility over the past year, which contributed to multiple downward revisions for growth forecasts, investment appetite among UAE High Net Worth Individuals (HNWI) does not appear to be dented, with 61% confirming that they would most likely invest in their top target city during 2016, according to leading international real estate consultancy, Cluttons.
Cluttons' 2016 Middle East Private Capital Survey, in partnership with YouGov, shows that London, which has historically been an investment magnet for Middle East HNWI, has emerged alongside New York as the top investment location outside the Middle East for UAE HNWI in 2016, while Dubai has been identified as the preferred location within the Middle East.
Steven Morgan, Chief Executive of Cluttons Middle East commented, "The strength of the US dollar, to which the UAE retains a fixed peg, has certainly contributed to the strong appetite for global property investments, particularly in the face of mute local and international economic conditions, which have been traditional triggers for capital flight to perceived investment safe havens."
"With investment safety at front of mind for HNWI, London is just ahead of New York as the most preferred city for investment. However, our survey shows that New York appears more frequently in investors' top three preferred cities for investment in 2016", he added.
According to the report, London has been an investment destination for Gulf buyers for many years, a trend which is expected to continue, with growth of average residential property prices expected to reach the 2.5% to 3% mark for prime Central London as a whole in 2016.
Cluttons data also shows that, whilst residential property remains the most attractive investment asset for UAE HNWIs, interest in commercial property continues to remain strong with 22% of UAE HNWIs surveyed indicating a preference for offices as an investment class.
Faisal Durrani, Head of Research at Cluttons said, "Despite tightening yields in London's office sector, which currently stand at 4.8% in Central London, when compared to office yields of circa 7% to 10% in Dubai, contract strengths play a significant role in driving inward investment into London's office market."
"Whilst lease terms in Dubai are typically between one to five years, lease lengths for London offices generally start at five years and often continue up to as long as 15 years, offering the security of a longer tenure. Moreover, the availability of investment grade stock is far more abundant in London than it is in Dubai. However, this appears to be changing slowly, with the sale of the Standard Chartered building in Downtown Dubai as a recent example", Durrani added.
According to Cluttons, UAE HNWI respondents also reported that locations within the Middle East are among their top three investment targets over the next 12 months, with Dubai and Abu Dhabi being the most popular locations in the region for investment.
"30% of UAE HNWI investors name Dubai in their top three most preferred cities, followed by Abu Dhabi at 23%. Dubai is both the leading target investment location as the 'most preferred' city as well as the most commonly mentioned city in investors' top three preferred locations in the Middle East", Durrani concluded.
Carried out in partnership with YouGov, Cluttons Middle East Private Capital Survey investigates investment trends and behaviours of the GCC high net worth individuals who either have made or intend to make an investment of USD 1 million or more in international property.
Part 1 of Cluttons' Middle East Private Capital Report series focusses on UAE HNWI. Part 2 will look at GCC investment targets in the Middle East, while Part 3 will focus on GCC property investment targets globally.
Press contact:
Danielle Ferns
Danielle.ferns@edelman.com
+971506629503
About Cluttons
Cluttons is a global real estate services company, with a presence in over 50 countries. Cluttons was on one of the first surveying and property advisory businesses to open offices in the Middle East, and now offers dedicated real estate services across the Arabian Gulf, with offices in Abu Dhabi, Dubai, Sharjah, Bahrain and Oman.
Cluttons provides clients with residential sales and letting services, commercial leasing and investment, consultancy, property and facilities management, and valuations, fulfilling their property needs across the Middle East. Cluttons delivers its high-quality real estate services to clients ranging from international corporates and institutional investors, to private individuals and families.
With a strong presence in the Middle East since 1976, Cluttons is a trusted market leader in the region, having grown its operations and established a proven track record of success over the last 40 years.
Founded in 1765, Cluttons employs over 700 staff worldwide and has a fast-growing international presence, including a network of offices in the UK, Europe, Middle East, Asia Pacific, India and Africa
© Press Release 2016
