Wealthy UAE investors prefer London and New York properties

About 61 per cent of rich investors from the UAE are likely to make global property investments this year, with London and New York the two favoured destinations, according to a Cluttons study.

The survey, conducted with YouGov, found that wealthy investors – those with US$1 million or more to spend on property – favoured London because of the currency advantages between the UK pound and the US dollar.

“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,” said Steven Morgan, the chief executive of Cluttons Middle East.

Mr Morgan said that with safety of investment cited as one of the top factors, London just edged out New York as the main target city.

Bangalore is the third-most popular city because of the high proportion of non-resident Indians among the ranks of the UAE’s wealthy residents.

Residential property is preferred by 50 per cent of investors, and 22 per cent favour commercial property.

Capital values for prime residential properties in central London are showing signs of slowing after nearly five years of strong growth. However, Cluttons predicts that they will continue to grow this year by 2.5 to 3 per cent.

Just over half (53 per cent) of those surveyed said they also planned to buy in the Middle East over the next 12 months. Dubai (chosen by 30 per cent of respondents) and Abu Dhabi (23 per cent) were the top regional target cities.

Meanwhile, CBRE has just published its investor intentions survey for the wider Europe, Middle East and Africa region for this year.

Within this region, London was again the city most in demand by investors (named by 15 per cent of respondents), followed by Madrid (12.2 per cent), Paris (11.6 per cent) and Berlin (10.8 per cent).

Nick McLean, the managing director of CBRE Middle East, said that the few deals done by foreign investors in the region “does not adequately reflect” the levels of interest from investors in the region.

“If the relative illiquidity could be solved here, the UAE in particular would see substantial inbound capital flows,” he said.

Offices were the most popular asset among investors from Europe, the Middle East and Africa, favoured by 37 per cent of survey respondents. But residential assets increased the most in interest – up to 12 per cent this year from 5 per cent last year.


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Michael Fahy

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