SIXTY-three percent of high net worth individuals in the nations of the Gulf Cooperation Council said that they plan to invest in real estate overseas during the rest of the year, according to a survey by international real estate consultant Cluttons.
The survey results showed that, outside away from don, New York, and Singapore were the top preferred destinations, with a little more than half of the respondents, 54 percent, preferring residential property. About 60 percent of the people surveyed said capital value growth was their main motivation for real estate investment.
In a commentary with the survey results Cluttons Senior Partner Steven Morgan attributed the continuing interest in overseas investment in part to budgetary pressures in the Gulf states from the oil price collapse than began in mid-2014. “However, from an investment perspective, sentiment remains positive amongst high net worth individuals who are targeting real estate in London, New York and Singapore in particular. These locations offer investors a variety of asset classes that command high capital value gains and high rental returns,” Morgan said.
London was the favorite investment destination among the survey respondents, being picked as a top choice by 11 percent of those surveyed. Cluttons said that Middle East investors spent $418 million for commercial real estate in London in the first quarter of this year, accounting for about 7 percent of the total investment during the period.
The report also noted that June’s vote by the UK to exit the European Union resulted in an almost instantaneous currency discount for buyers from the Gulf states, which has helped to boost investment activity.
New York was the second most-preferred destination, picked as the top choice by 5 percent of the survey respondents, with Singapore a close third, selected as the number one preference by 4 percent.
The report took special notice that Indian cities such as Bangalore, Mumbai and New Delhi appeared among the top ten preferred destinations, which Cluttons said may be a reflection of strong push for foreign direct investment (FDI) from among the large Indian diaspora by the Indian government.
Among locations in the Gulf region, Dubai, Abu Dhabi, and Sharjah in the UAE were noted as investment “hot spots,” reflecting the country’s perceived stability as a regional safe haven, the report said.