Why This UK Town Is Generating Interest from Arab Investors
London has long attracted property investors from the Middle East thanks to high-quality education, a regulated market and the weakened exchange rate for the British Pound.
However, as prices for central London properties become increasingly unaffordable and offer current average returns at 2%, it seems the love affair between the UK capital and Arab investors is steadily diminishing.
The announcement of Slough’s Queensmere and Observatory shopping centres being sold for £130million to investors in the United Arab Emirates suggests that Arab investors are now focusing on commuter towns located just outside central London. The Slough Observer, who covered the story, revealed that the Abu Dhabi Investment Authority (ADIA) purchased the centres spanning 660,000 sq ft on behalf of the Abu Dhabi government.
As Slough was recently voted ‘The Best Place to Live and Work in the UK’ and is currently undergoing a £450million regeneration scheme, it’s easy to understand why the Abu Dhabi government wanted its share of Slough’s success story. With commuter belt locations offering lower price points with significantly higher returns in the region of 5 – 6%, this certainly gives an insight as to which markets are broadening their appeal for overseas investors.
“We have seen huge interest from investors in the GCC looking towards the London Commuter Belt”, says William Page, Regional Sales Director of SevenCapital based in Dubai.
“Whether it’s a first-time property investor or representatives of a property fund, our Arabic clientele are looking for areas experiencing investment by the government, infrastructure development, a strong employment sector as well as areas in high-demand for quality accommodation.”
As young professionals are being outpriced in London and moving to more affordable areas it’s easy to see why commuter belt locations are so appealing for investors. Areas such as Slough, located directly on the Crossrail network which connects the town to central London in just 18 minutes. This offers tenants residing in these locations a short commuter into work plus the luxury of affordable accommodation just outside of the city centre.
A study by Cluttons revealed that London emerged as the most preferred global property investment hotspot in 2016 for GCC’s High Net Worth Individuals, with 17% naming the capital as one of their three top international property targets. But many predict a bucking of the trend.
From an investment perspective, the lower entry points and higher-yield potential of commuter belt London is presently outperforming the allure of the capital. And with the likes of Ferrari, Virgin Media and Honda choosing Slough for their UK headquarters, who knows which other big names will invest in the town making business headlines all over the world.