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London looks attractive to Middle East investors

Middle East investors see Brexit opportunity

By Maurice Shasha  //  Tue 6th December 2016
Brexit opens window of opportunity in London for property investors from the Middle East and Asia.
The Bank of England’s decision to cut its base rate to 0.25% has given investors from the Middle East and Asia further encouragement to buy property in central London.

Although the UK’s vote to leave the EU sent shivers through London’s commercial property market, some overseas investors have identified Brexit as an opportunity.

In one high-profile example, a consortium of Saudi and UK investors bid $1.3bn for Grosvenor House Hotel.

A source close to the deal said the group accelerated their bid so that his Saudi partners could seek to take advantage of the drop in sterling since the vote for Brexit.

Jassim Alseddiqi, chief executive of Abu Dhabi Financial Group, says he has seen enquiries from Gulf buyers about homes in London rise 25% since the referendum.

“There is a huge demand now among dollar-based buyers,” he says.

A private Middle Eastern buyer has, meanwhile, exchanged contracts to acquire 5 King William Street, an office block leased to Japanese investment bank Daiwa Capital Markets, for £90m.

One London-based fund manager says Middle Eastern clients are keen to increase their exposure to property in London.

Middle Eastern investors have a long history of owning property in London, buying at least £5.9bn of UK property in 2015 as they looked to offset losses from the commodities slump.

However, buyers from Asia— many of whom entered the UK market after the 2008 financial crisis — are also seeking to buy post-referendum.