London named top global destination for GCC investment as planned long-term spending rises
- GCC investors spent an average of $112.45m on London property in the last 12 months, up from $90.79m the previous year, with London named as the most popular investment target among international cities.
- Over the next five years, GCC investors have already committed to spend an average of $92m in the UK property market, compared with $69.14m this time last year – a 33% year-on-year increase.
- The findings come from Al Rayan Bank’s 2024 GCC Investment Barometer, which surveyed 150 investors from Saudi Arabia, Qatar and the UAE.
- Experts at Al Rayan Bank say there is a bias towards the UK because of long-standing relationships, surplus demand and rental growth.
London remains the top global destination for Gulf Cooperation Council (GCC1) investment, with planned long-term spending in the property market set to rise significantly, according to a new report from the UK’s most successful Islamic Bank, Al Rayan Bank.
The 2024 GCC Investment Barometer, which surveyed 150 investors from Saudi Arabia, Qatar and the UAE with an average net worth of $13m, found in the last 12 months alone respondents invested an average $112.45m in London property, compared with $90.79m in the previous year, an uplift of almost a quarter (24%).
During this time, London has been the most popular property investment target of all the international cities surveyed, ahead of Miami (23%), New York (21%), Paris (19%) and Los Angeles (19%).
Looking ahead, all respondents are planning to make new investments or increase their investments in UK property over the next five years.
The research shows investors have already committed to spending an average of $92m, up 33% from $69.14m in 2023 when the same research was conducted, with the most common reason for choosing to invest being the desire to relocate to the UK or to have the option of living there. Experts anticipate respondents have erred on the side of caution, and the planned spending value is likely to be higher in reality.
Almost all (99%) say the UK property market is attractive, up from 89% last year, with 95% confident that the market represents a strong investment opportunity for the next five years. Key factors driving this interest include the capital’s strong pipeline of diverse developments (48%), favourable terms of purchase (42%) and how investing also provides an opportunity to live in the city (38%).
Despite London being the most popular major city to invest in globally for the last 12 months, Hong Kong comes top for the year ahead (29%), followed by Monaco (27%), Tokyo (26%), New York (25%) and Paris (25%). This reflects short-term uncertainty about the content of the Labour Government’s October Budget.
Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, said: “The special relationship between the UK and the GCC remains as strong as ever. This year we’ve seen the introduction of visa-free travel for GCC nationals which will further enhance this link, and the UK property markets appeal.
“However, the new UK government and revenue-raising policies impacting GCC property investors such as Capital Gains Tax and Stamp Duty have no-doubt informed investors’ decision making which is why we're expecting to see some short-term uncertainty, hence London's position dropping.
“While these new policies will undoubtedly inform investor’s decision making, the UK property market remains a resilient and stable investment opportunity.
“Investors know they can rely on the UK’s economic strength, growing demand for housing, rising rental incomes, transparent legal system and its established network of skilled property professionals, which make buying and owning property in the UK a profitable and smooth experience.”
Many investors are looking across the UK’s regions too with Liverpool (35%), Manchester (29%), Cardiff (21%), Birmingham (20%) and Bristol (19%) named as the top five destinations outside of London (54%), according to the research.
Of those planning to invest in London, 43% are targeting Central London, with Greater London (40% up from 31%) and West London (38%, up from 31%) the next most popular areas.
The types of property respondents are planning to invest in within the UK is mixed, 59% are targeting residential apartments (unchanged), 56% looking at commercial office space (up from 52%), 47% residential housing (down from 49%) and 46% mixed-use developments (up from 40%).
Sustainability also continues to be a growing consideration for investors, with 48% of respondents stating access to green investments make London an attractive investment target.
Maisam, added: “The 2024 GCC barometer shows a positive outlook for the UK property market, especially for medium and long-term investments.
“The capital continues to hold a particular attraction for people from the GCC, both because of the lifestyle that is achievable here and because it is considered an investment that delivers safe returns.
“Al Rayan Bank has been a valued partner to GCC investors for two decades now arranging Sharia-compliant finance for real estate investors, and we are committed to providing investors with suitable financing solutions into the future."
