MIDDLE EASTERN BUYERS SET TO ACCOUNT FOR 25 TO 30% OF PRIME CENTRAL LONDON RESIDENTIAL SALES

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  Prime central London prices to grow by 7% in 2015

 According to CBRE’s latest research paper, post-election UK has seen renewed investor interest in London’s prime residential real estate particularly from Middle Eastern investors.

Prior to the election, buyers from the Gulf region accounted for approximately 20% of the market for newly built residential property in prime central London. Since then, the number of enquiries to CBRE offices from the region has risen and CBRE anticipates that regional buyers will soon account for 25% to 30% of sales post-election.

Safina Ahmad, Head of GCC Residential Agency, CBRE, commented, “London continues to remain the destination of choice for Middle Eastern investors, due to its quality infrastructure, stable political and legal framework and quality of life. The city has always attracted institutional commitments from the region but we are now increasingly seeing many individual buyers purchasing residential property, treating the city as a second home.”

Jennet Siebrits, Head of UK Residential Research, CBRE commented, “As the UK went to the polls there was some uncertainty as to the outcome, with a hung parliament looking likely. This had a direct impact on property transaction levels in Prime Central London in the months leading up to the election. Once the Conservative majority was announced, confidence returned to the market, and we have already seen a strong uptick in interest from the Middle East. The safe political and economic climate makes London continually attractive. London has long established itself as a financial hub, where many Middle Eastern buyers are confident to purchase, knowing their investment will be safe. We have also seen continued demand from many international buyers who use their London property as a base for their spouse or for children to stay as they are educated in the capital, meaning that purchasing a property, rather than a three to five year rental, is still much more appealing.”

According to the report, activity in prime central London is set to return to previous levels as pent-up demand resurfaces. Prices in prime central London will grow by 7% in 2015, with total growth of 31% forecast over the next 5 years.

London is one of a handful of global cities that attracts the most affluent international buyers. As a result, London super-prime prices are second only to Hong Kong at around $7,500 per sq ft. This follows average annual growth of around 10% over the past decade, stated the report.

However, in the run up to the election activity in the prime London markets slowed off with sales down around 25% in the first quarter of the year and price growth down from its peak of 19.3% in mid-2014 to nearer 8%. In the week following the election there was a 25% jump in viewing enquires in CBRE’s West End office.

The report noted that high net worth buyers are attracted to London for a number of reasons including the lifestyle, time zone, language, and ease of access. However, the most important drivers remain the strength of the local economy; London is arguably the global preeminent financial centre, which continues to attract global companies such as Amazon and Google amongst others.

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About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue).  The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.ae

Prime London residential properties forecast for 31% growth in the next five years