Middle East investors are now behind 20 percent of all prime central London real estate deals following a rapid rise in interest over the past 12 months, according to a report by IP Global.
Demand for London property and especially its 'trophy' assets of Belgravia, Knightsbridge, Mayfair and Chelsea have traditionally been a key requirement for investors from the GCC, and IP Global predicts that Central London will continue to lead the pack in terms of growth throughout 2011.
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Full details from IP Global follows.
IP Global, a leading property investment company specializing in securing prime investment opportunities in 20 emerging and developed markets around the world, today offers an update on the London real estate market, a sector that it places as one of the most attractive in the world in terms of Middle Eastern investment.
The firm highlights that overseas property investors now account for 48% of all prime central London property purchases, and in particular Middle Eastern buyers account for 20% of overall purchases, a figure that has risen rapidly over the past 12 months. Furthermore, 60% of all UAE investment has been in London, with the remaining 40% in Asia Pacific. This signals a positive outlook for London's property market, as it accounts for nearly 100% growth on IP Global's 2010 figures. Demand for London property and especially its 'trophy' assets of Belgravia, Knightsbridge, Mayfair and Chelsea have traditionally been a key requirement for investors from the GCC, and IP Global predicts that Central London will continue to lead the pack in terms of growth throughout 2011.
As well as having the requisite prestige factor, IP Global also notes that London also offers an attractive environment in which to "de-risk" during the current period of turbulence in some areas of the Middle East, and rising inflation in Asia. London has a sound economic and political infrastructure, mature legal frameworks and solid growth potential, whist maintaining a key stake in the global financial services sector. Another appealing factor is that Central London rents are currently at an all time high, and investors can expect an approximate rental yield of 4 to 6%.
Tim Murphy, CEO of IP Global, comments:
"London has emerged as one of the top property investment hotspots in the world, especially for Middle East investors. While London has always been a prime property market, factors such as the recent unrest in some parts of the Middle East and the rising inflation in Asia have added to London's appeal as a preferred investment destination for potential property buyers. London has seen a strong start to the year and we expect this to carry on through 2011.
As a final note, IP Global has pointed out that despite this strong demand, there is a fundamental shortage of supply, given that many of London's finest properties are listed and protected from future development. As a result newly built housing is being absorbed quickly into the market and premiums are being achieved above local embedded value.
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