Middle East Buyers Most Drawn In By Luxury London Real Estate in Four Years

According to property consultancy Knight Frank LLP, Middle Eastern buyers of luxury real estate in central London reached a four-year high in the second half of 2022 when they took advantage of the depreciating pound and loosened covid regulations.

Just behind investors from Europe and the UK, buyers from the area accounted for 11% of real estate sales in some of London's most desirable postcodes.

As per Knight Frank, the last time purchasers from the Middle East made up a larger share of purchases in the region was in 2015.

"When price and currency moves are coupled, buyers from the Middle East have been relatively free to fly to London and take advantage of the weak pound," said Tom Bill, head of UK residential research at Knight Frank. "This has resulted in discounts of more than 40% compared to 2014."

Investors from the Middle East made up just 2.2% of all sales in London's top postcodes at the height of the pandemic in the first half of 2020 because the area, along with the rest of the world, had implemented a number of stringent social restrictions to lessen the impact of the virus.

After some early restrictions, Middle Eastern nations like the United Arab Emirates mostly refrained from the widespread full-scale lockdowns and instead relied on rigorous mask regulations and vaccinations.

Visitors from around the world seeking to escape restrictions in their native nations were attracted by the government's quick response to the outbreak. One of the quickest vaccine rollouts in the world was in Dubai, which is a part of the UAE.

As interest rates increase and in the wake of the political unrest brought on by September's mini-budget, London, which has long attracted sizable amounts of foreign investment and saw the largest capital inflows of any global city in the first half of 2022, confronts uncertainty concerning property prices. According to information gathered by MSCI Inc., foreign dealmakers made up 57% of the real estate investment in London last year as opposed to 65% in 2015.

Wealthy families are taking a long-term approach to London, often committing for the next 50 years, as stated by Henry Faun, head of Knight Frank's Private Office in the Middle East. “Investors continue to have a positive perspective on London; the Emirati clients I am working with believe it now presents an opportunity unlike anywhere else in the world and will rebound quickly as it always has”.

Since sales started late last year, 8 Eaton Lane, one of London's newest luxury residential complexes with two-bedroom flats starting at £3.8 million, has drawn a lot of attention from bidders in the oil-rich Gulf area, said Knight Frank. With features including a gym, spa treatment rooms, swimming pool, cinema, and business suite, the Grade II listed property in London's Belgravia is being converted into 42 homes and seven shop spaces.

(Bloomberg.com)