Investment insights shared by Savills at exclusive event in Riyadh

World leading real estate advisor, Savills Middle East, together international law firm, Trowers & Hamlins, hosted Saudi investors at a high profile event at the Ritz Carlton in Riyadh on Wednesday. 

Research shared by Savills during the event, identified that investment in global real estate is growing faster than any other region. In fact, outbound investment in real estate from the Middle East region grew by 62% in the first half of 2019. 

“Middle East investors are increasingly drawn towards global real estate assets as long-term investments. That interest has translated into a sharp increase in cross-border transactions, particularly into mature global destinations such as Northern Europe and North America, with US$8.9 billion crossing borders in H1 2019 – an increase of 62% compared with H1 2018” said Steven Morgan, CEO ME, Savills.

The UK is the most popular country for capital investment, followed by Germany, with London traditionally holding the title of most popular city for global investors, keen to take advantage of currency exchange rates. Savills has identified that a £5m investment into prime central London real estate would effectively cost 40% less today than 5 years ago (pre-tax). 

“London leads the way for cross border investment into real estate. Our research indicates London is the third most resilient city in the world, so while there is undoubtedly some volatility around Brexit, the underlying strength of the UK capital as a global business hub means it will remain a powerhouse. Average prime central London prices are around 20% lower than five years ago and combined with current dollar-pound exchange rates, Middle East investors are already taking advantage of very favourable terms with a view on the medium to long term fundamentals of the London market.”

Savills predicts that prime London residential property values will recover in a post-Brexit scenario, potentially increasing by 12.4% over the next 5 years. UK GDP is set to grow steadily, with an increase of 27% between 2019 and 2029, with London being one of the prime beneficiaries, as it is responsible for approximately a quarter of all of the UK’s economic output. This is only set to increase as major global companies are incentivized to locate in the UK capital, already Google is investing £1bn into a new King’s Cross HQ which will generate 3,000 jobs by 2020, and Apple is creating another 1,400 jobs to fill its new world-class hub at Battersea Power Station HQ. 

As companies invest into London, so too are developers, who are offering increasingly attractive opportunities. The key trending investment opportunities in London include:

• King’s Road Park – developed by St. William, Berkeley Group, this multi-phase new development hosts top of the range facilities including two in-house cinemas, 25m swimming pool, gym, spa, and golf simulator
• Grand Union – developed by St George PLC, Berkeley Group, this new canalside residence in Alperton is part of a GBP 13bn regeneration project, set amongst 11 acres of public green spaces including landscaped gardens and waterside walks.  These regeneration facilities will offer local employment hubs and work spaces.
• Battersea Power Station – this riverside mixed-use regeneration project has transformed an iconic Art Deco masterpiece into a fully functioning, thriving community with a range of apartment and penthouse options, and wellbeing spaces.
• Triptych Bankside – as a transport hub with an enviable location near to Borough Market, Shakespeare’s Globe Theatre and The Shard, this residential scheme is developed by Sons & Co JTRE and is within easy commuting distance to The City of London.