RIYADH: Middle Eastern investors are expected to pump $3.2 billion into the UK real estate market in 2024 to capitalize on its increasing affordability and a growing interest in the student accommodation sector, according to London-based Bank of London and The Middle East.
BLME said the financial strength of the Gulf Cooperation Council economies together with an appetite for assets diversification — as well as an interest in university related properties — are the main drivers fueling the anticipated investment.
The Shariah-compliant institution added that advisers and intermediaries who work with BLME predicted the purpose-built student accommodation asset class would see the most significant investment growth in 2023.
The longstanding affinity of Middle Eastern students with the UK’s schools and universities and the low rate of tenant failure make it an attractive prospect for speculators, stated the release.
“With a perfect storm of strong dollar-pegged GCC currencies, surplus cash following last year’s oil boom and falling UK asset prices, investors in the Middle East have a golden opportunity to spot a bargain while property prices are low,” said Andy Thomson, head of real estate finance and investments at BLME in a press statement.
In 2022, both Saudi Arabia and the UAE made the list of the top 10 countries outside the EU for students coming to study in the UK.
The inflation rate in the UK has caused domestic mortgages to hit the highest level since the global recession in 2008, leading to less demand, which could ultimately result in a fall in real estate prices.
The report further noted that London remains the most preferred destination for GCC investors in the UK, but they are also considering other cities such as Manchester, Birmingham, Newcastle and Bristol.
In January, a report released by real estate firm JLL confirmed that the appetite of Middle Eastern investors for global property markets is expected to grow amid global economic headwinds.
“The willingness of investors to take advantage of discounted buying opportunities will continue to emerge in the face of the uncertain economic outlook in Europe and the US and moderated competition in bidding,” said Fadi Moussalli, JLL’s executive director of International Capital Coverage at that time.