Brexit no barrier for Middle East investors
Investors set to visit the Middle East from the UK.
A government-led delegation of UK investors and developers are set to visit the Middle East to strike deals with investors as they continue to plough their wealth into the UK post-Brexit.
They will be attending two set-piece events designed to reinforce investment and trade links between the regions as total international investment into the UK from the Middle East topped AED 15.1 billion in 2016.
While Middle Eastern investors have traditionally been drawn to residential property in London, the AED 18.4 billion top up this month of a AED 229.5 billion real estate and infrastructure investment portfolio in the UK owned by the Qatari government, shows that the appeal stretches even further.
Sir Edward Lister, who is the chairman of the government’s Homes and Communities Agency, is leading the UK delegation.
He said, “The Emirates have always been strong investors in the UK, not just in London, but throughout the country and we have always welcomed that investment.
“In spite of Brexit, the lying property dynamics in the UK remain unchanged. The demand for all types of property is absolutely enormous. The UK government target for housing is 250,000 homes a year, and in a good year we are only achieving 170,000 so the pressure is on for housing across the country and we need with that modern office accommodation as well as industrial and distribution warehousing.
“In a country where property is so well protected by rule of law, the UK always makes a sound investment.”
Sir Edward, who is also the former deputy mayor of London also said he was looking forward to speaking to experts from the Middle East to learn about the innovations being used, especially next generation construction methods, which could also benefit the UK.
The UK’s trading relationship with the region dates back over two centuries and the special relationship between the UK and the Gulf is reflected in the booming trade figures.
Trade between the UK and the GCC has soared by 185 per cent between 1999 and 2015, with the UAE emerging as the UK’s third largest export partner outside of Europe and the 11th largest trading partner for the UK overall. In the wake of Brexit, the UK’s international relationships are expected to be bolstered and nurtured further.
Faisal Durrani, Head of Research at Cluttons explained, “We already know that London residential property is a favourite asset class among the region’s wealthy, as has been reflected in our Middle East Private Capital Surveys for a number of years. London’s nickname as the ‘eighth emirate’ is further substantiated by the tremendous volume of investment it attracts from the Middle East and the GCC states in particular.”
“As well as Qatar’s multi-billion-dirham investment into the UK, Kamco of Kuwait and Rasmala of Dubai recently completed a AED 248 million deal to acquire an Amazon distribution warehouse near Edinburgh that is responsible for 3 of 8 Amazon parcel deliveries in the UK. And Abu Dhabi Investments acquired a AED 1.4 billion share of a shopping mall in Liverpool recently.”
In Dubai, developers are also inviting overseas investment.
Sanjay Manchanda, the chief executive of one of the world’s leading developers Nakheel, said, “There is a very attractive business model here in Dubai. Everybody needs a diversified portfolio to mitigate risks. If you compare Dubai prices with those in Hong Kong and Singapore, New York and London, they are very competitive and much lower. Today the returns on real estate in Dubai are around 5-10%.”
Durrani continued, “While the UK will always be perceived as a safe harbour for investments, the dizzying speed at which cities in the Gulf have arisen are attracting the attention of the global investment community, particularly when you have mega projects like the USD32 billion Al Maktoum International Airport in the making, along with ground breaking new transportation infrastructure like 3-D printed skyscrapers and Hyperloop waiting in the wings to provide the next generation of economic growth."
Sir Edward Lister, Sanjay Manchanda and Faisal Durrani will be speaking at the Middle East Real Estate Forum, which includes two set-piece events designed to reinforce investment and trade links between the UK and the Middle East.
The events are in Abu Dhabi on 25 April and Dubai on 26 April.
They are being organised by global real estate publication EG, which is working in partnership with the UK DiT and international real estate adviser Cluttons, to put the global ambitions of Abu Dhabi, Dubai and the UK under the spotlight.
The events have a lineup of notable speakers who will also exchange thoughts on best practice approaches to large-scale regeneration, development and infrastructure delivery.
EG Editor Damian Wild, who will chair the events, said, “This investor tour of the Middle East is taking place at a very exciting time. The UK is at a significant moment in its recent history while the Middle East is one of the world’s most dynamic business environments. It’s no surprise that senior figures from the UK real estate industry have been quick to join the delegation and hope to explore business and investment opportunities in Dubai and Abu Dhabi.
“The investment opportunities the delegation will be showcasing cover the length and breadth of the UK and range from residential to commercial to infrastructure.
“Working with Cluttons again, we hope to build on the success of our first forum, which we staged jointly in Dubai three years ago. We are also grateful for this support of the UK government’s Department for International Trade. Indeed many of the delegates travelling with us to the Middle East also joined us on a similar trip we ran with DIT to New York and Toronto last year.”