Dubai: Some of the UAE’s most high-profile companies and high-net-worth individuals are not letting Brexit sour their London aspirations.
Despite the endless round of debates and votes in the UK Parliament, these UAE entities are maintaining their exposures in London’s real estate, while others are about to make an entry.
There are talks that Dubai-based Sobha Realty, the name behind the multi-billion dollar projects in Dubai, will be opening a London office shortly. Its founder, P.N.C. Menon, has in the past even spoken about his ambition to launch a full-scale project there.
Other UAE groups are already well on their way to building signature projects there. The Abu Dhabi Financial Group has a majority stake in high-end developer Northacre, which in turn is building a residential project – The Broadway - at a site that earlier housed the New Scotland Yard.
Lulu Group is refurbishing a heritage site
The Lulu Group last week issued a statement that it is on track to open a hotel later this year and operated by the Hyatt Group. This follows a 75-million-pound refurbishment programme of the property that had previously housed London’s Metropolitan Police headquarters. (It had acquired the site and the original building for 110 million pounds in 2015.)
Brexit on the face of it is proving less of an issue with UAE and Gulf investors interested in prime – is there any other kind? - London real estate. According to Alessandra de Paiva Raposo, founder of DPR Property, an advisory firm, ““Brexit or no Brexit, London is still a safe investment, though Middle Eastern buyers are increasingly taking a longer term view to their property investments in the capital.”
“Despite the ongoing uncertainty, London’s position at the centre of the global economy means it has retained its appeal for buyers, especially those that are dollar-based.”
Gulf investors are on the lookout for sweet deals
What of individual investors from the Gulf, the sort who would pick up another property asset in London because they offer the best insurance against downturns? Has Brexit soured their London dreams?
“While there has been some slowdown as investors await more clarity on Brexit and, more importantly, a potential general election, there’s still a swathe of investors buying in the UK,” said Richard Merryweather, Joint Head of UK Investment at Savills, the consultancy.
“Since January we signed over 30 deals, including for offices, as appetite remains across a diverse range of assets”, he added.
Sure, some UK developers did have to lower their prices or come up with discounts for prospective buyers to take the bite. Average values for prime London property ended March down 11.9 per cent from their 2014 peak, while in central London they are 19.4 per cent below their 2014 highs at the end of last year, Savills estimates.
But the pace of decline is dropping – in the first three months of this year, the decline at the premium end was just 0.3 per cent. This is the smallest quarterly fall since the 2016 Brexit vote.
Enough to get Niccolò Barattieri di San Pietro, Chief Executive at Northacre, thinking of life beyond the Brexit debates and votes. In a statement, he said: “Despite the UK’s expected imminent departure from the EU, we can confirm it certainly hasn’t put off foreign investors.
“There is increasing speculation that post Brexit the floodgates will open – those that were taking a “wait and see” approach will release funds and London will see a significant influx of capital. We are wholeheartedly betting on Britain…”