Has London become Qataris’ second home?
Qataris are getting increasingly interested in owning residences in London.
Middle Eastern investors form 15 percent of the total buyers for London’s sold properties, making the highest foreign investment share after South East Asia. While these investments fall in every price range, most of those owned by MENA buyers are in the high-end category, making them the majority owners of any property priced at more than GBP5 million (QAR27 million), suggested a joint report by CBRE and Savills.
While a large number of these deals are primarily business focused for resell or renting purposes, many purchases are made for private use.
Mark Collins, chairman of the London residential business at CBRE was in Doha recently. When asked about his opinion on Qataris’ motivation to buy London residential properties, Collins said, “I think it is a combination of reasons. In some cases their children might be educated in London; sometimes it is simply because they want it as an investment, but often it is as a home and to have a very nice base when they are in London.”
For Julian Mills, senior director in the residential development team of Savills in London, it is precisely the variety of reasons that makes London home to less risky investments, “There are so many different reasons to purchase a residential property in London and that is why it is so popular globally,” said Mills of Savills.
“Often, Qataris buy residential property in London to have a home,” – Mark Collins, chairman residential, CBRE.
Whether it is about visiting London during holidays or to spend some time with their children studying abroad, the cultural preferences of Arabs are reflected in the type of residential units Qataris prefer to buy. “We are seeing a significant change where people might like larger apartments where they might want two or three bedrooms penthouses so they can be with their children,” observed Collins of CBRE.
From their meetings with the local investors in Doha, both Collins and Mills agreed that Qataris seem to have a clear idea of where they are investing their money.
Mills was surprised to find out that the locals in Doha not only had a good understanding of London properties but, he said, they also appreciated the attention to detail and the design of the apartments.
From an investment point of view, the Qatari investors seem to have a fair idea about the returns these residential investments can generate. Providing the industry speculations, Collins told that the prices of London’s residential properties are expected to increase roughly 25 percent in the next five years.
While the halt of Chelsea Barracks housing development could have created a negative sentiment for Qatari buyers, Mills said that “most of the time when you are talking about something which is in such a prime location, whatever trips or stalls it might have, at the end of the day, they are not going to affect its value in the long term.”
The overwhelming amount of foreign investments in London’s residential market has raised concerns of overpricing and lack of availability for the locals. “At the moment in central and wider London, there are about 16,000 to 20,000 new homes being built, the mayor for London’s target is between 30,000 and 40,000. So, there is a major gap between what is currently being delivered versus what is needed,” closed Collins.