Middle Eastern investors in London’s property market increased four percent in 2011 as wealthy buyers looked for a safe haven amid regional political unrest and the sovereign debt crisis, property consultants Jones Lang LaSalle (JLL) has said.
Large family homes in the wealthy areas of Marble Arch, Knightsbridge and Belgravia, ranging in value from $3m to $24m are the most popular properties amongst regional investors but a growing number are looking at investment opportunities in Marylebone and Fitzrovia, according to the firm’s Central London Residential Market report.
“London continues to offer solid growth potential and its twinned status as an accessible capital city and financial centre, alongside a stable political system and transparent legal framework, continues to attract interest from across the Middle East,” Ben Stroud, associate director of residential agency, development & investment at Jones Lang LaSalle London, said in a statement.
“London’s reputation as a safe haven for investors is being reinforced by global troubles not undermined. Additional incentives such as a weak Sterling and a favourable tax system are also making it more attractive amongst a range of potential foreign investors,” he added.
London property has long been seen as a safe haven for investment for wealthy Middle East investors. Real estate consultancy Savills in June said MENA homeowners hold 13 percent of London’s most expensive property by value with an average spend of £4m.
Harrods Estates, the property arm of the Qatar-owned department store, in August said a Middle Eastern businessman had signed a lease to rent London’s most expensive property at a cost of £55,000 ($90,000) a week.
The company said it had seen the average cost of its rented property increase to £4,285 from March to date compared to £1,955 the same period the previous year.
Middle East investors accounted for nine percent of all Jones Lang LaSalle’s sales in central London last year, up from five percent in 2010, making them the second largest group of foreign investors behind nationals from Asia Pacific.
Property prices in central London have increased ten percent over the last two years on the back of a shortage of property in the best addresses. Prices in the capital are set to increase four percent this year, five percent in 2013 and peak at eight percent in 2014, said Jones Lang LaSalle.
Rents are expected to increase seven percent over the next 12 months and 8 percent in 2013, “providing a solid return for potential investors,” added the firm.