With speculation continuing around the likelihood of a Hard Brexit, there are good reasons to believe that London will retain its status as a leading global city, financial hub and property investment destination. Its strong fundamentals mean it remains Europe’s number one tech hub for future companies and attracted more foreign direct investment than any other city in 2018, according to the latest data from London & Partners found.
In a challenging environment where investors continue to hunt for yields whilst balancing portfolio risks due to uncertainties, investors from around the world, specifically from the Middle East, continue to seek assets in London due to its safe-haven status.Regardless of our recent trade transitions since the Brexit vote, the Middle East market has always been important for UK property and economic investments. A Knight Frank report recently projected the number of Ultra High Net Worth Individuals (those with wealth over £30m) in the region is expected to grow by 20 percent by 2023. Although the region has a large expatriate community, many of those individuals seek to emigrate, with the UK being the most preferred destination. A recent Knight Frank report found that 74 percent of the high new worth individuals in the Middle East own a second home abroad with 55 percent of them looking for foreign investments elsewhere, with the UK being top choice, especially in real estate.
In addition, a significant proportion of investors from the Middle East are the non-residential Indian community, who continue to grow and diversify their portfolio geographically. This group in particular favour UK real estate investments, with the UK also providing access to world class education opportunities for their children, in addition to new business opportunities and stable investment returns. The Middle East is a region where a high proportion of families send their children abroad for tertiary education and in this context, London draws significant interest.
As Middle East investors continue to look for the best opportunities abroad and real estate remains one of their more preferred asset classes, they will be aware that London’s attractive fundamentals are not going to change regardless of whatever happens with Brexit.
Global citizens do well to consider safe havens like London. It would be wise to model a range of potential scenarios that could play out, including the impact on trade, foreign direct investment, liberalisation and regulation, immigration, trade policy and wider geopolitical uncertainty in the future. London and the UK offers a secure future.