Mideast shies away from UK properties
[11/06/2005]

Investment in UK`s property sector from the Middle East has slumped by 50 per cent reaching Dh3.13 billion (£460 million) in 2004 from a record Dh6.27 billion (£920 million) in 2003, according to a report.

Gulf investors are slowing their investment in foreign commercial property and investing a higher proportion of their capital in the Middle East, says international law firm Trowers & Hamlins.

According to research done by DTZ, Middle Eastern investors accounted for just three per cent of total overseas purchases of UK properties in 2004. Middle Eastern investment in UK commercial property is now at its lowest proportion of total overseas investment since 2000.

The strong growth of the Gulf economies, at a time when investment sentiment has turned away from traditional markets such as the USA, has created many more investment opportunities in the region than before. Middle Eastern investors have been enticed to keep a higher proportion of their money at home.

"Gulf investors lost confidence in US and UK equities but still looked to keep a lot of their money abroad, for example in UK property. With Gulf economies developing rapidly and with domestic land and equity values at an all time high, money is now being invested at home in the Gulf and generating high returns," said Nick Edmondes, Partner, Trowers & Hamlins.

Trowers & Hamlins said, this is the result of three key factors falling value of the dollar, falling initial yields from UK commercial property and the desire to invest increasing amounts of available

capital in property and equities within the Gulf region itself.





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