Gulf investors snap up office space

Dubai A group of Gulf and other foreign investors have snapped up four properties in the United Kingdom, valued at Dh367 million ($100 million).

Capital Trust Group (CTG), a private equity firm, yesterday announced the acquisition of commercial real estate of about $100 million spread among four city-centre locations in the UK.

Secure, long-term leases

"While the group continues its search for investment properties in the UAE, it has acquired four office buildings in Leeds, Cardiff, Southampton and Birmingham. All properties are single-let to grade A tenants with leases ranging from 11 to 15 years," a company spokesperson said.

The Group chairman, Bassam Aburdene, commented that "UK real estate continues to be an important part of our clients' portfolios, mainly for the security and predictability of its income stream and the liquidity which makes the acquisition and disposal process straight-forward and investor friendly."

The UK residential market is becoming increasingly attractive to Middle East investors, according to a latest report published by Jones Lang LaSalle, the world's leading real estate investment and advisory firm.

"UK house price growth will be flat in 2012 but stronger growth will return from 2013. London will continue to outperform. The shift towards renting will continue and private professional investors will become increasingly important and command a larger share of new and second-hand home purchases," it said.

The year 2013 will be a brighter year for the UK, eurozone and global economies and the UK housing market will become stronger and more active. UK house prices will rise by around 3 per cent, it said.

In the medium-term, stronger house price growth will return, pushing towards 5 per cent per annum, it said.

Capital Trust, which is headquartered in London, with offices in Dubai, Beirut and Washington, has been active in real estate markets since 1985.

Strong appetite

Emad Odeh, CTG managing partner, told Gulf News that the majority of investors in the deal are from the GCC. "There is a growing appetite among the Gulf investors in the UK's commercial real estate."

In 2011, the firm sold London new build residential property to foreign buyers valued at circa $2 billion, of which regional investors accounted for about 9 per cent, up from 5 per cent in 2010. The Middle East now accounts for the second largest group of foreign investors into the London residential market after nationals from the Asia Pacific region who accounted for 15 per cent of overall sales.

Ben Stroud of Jones Lang LaSalle, UK, said that Middle Eastern investors have strong historic links to the UK property market and have typically invested for the longer term.

"We are definitely seeing increased interest both in terms of volume as well as the variety of locations that regional investors are interested in," he said.

CTG's Gulf office also announced that there is a serious demand from investors in the Dubai real estate market, especially income-generating real estate, which led to significant increases in the value of assets and rents.