Wealthy individuals in the GCC will continue investing in global real estate this year with London, New York and Singapore the top preferred investment destinations.
According to a report by estate consultancy Cluttons, 63 per cent of GCC-based high net worth individuals claim they are likely to invest in their most preferred real estate investment location during 2016.
The third instalment of Cluttons’ 2016 Middle East Private Capital Survey, carried out in partnership with YouGov, shows that London, New York and Singapore are the destinations of choice (outside of the Middle East) for the region’s wealthy, with 54 per cent naming residential as their preferred asset class.
Sixty per cent of those surveyed identified capital value growth as their main financial investment driver across all asset classes.
Steven Morgan, senior partner at Cluttons, said: “For the Gulf states as a whole, the oil price collapse that began in mid-2014 has certainly put government budgets under pressure. This has also triggered a series of macro policy amendments, aimed at tackling the projected budget shortfalls.
“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.”
Cluttons’ latest report says that London has emerged as the favourite global property investment destination amongst respondents, with 11 per cent naming the British capital as their most preferred city for investment.
In the first quarter of 2016, Middle East investors pumped $418 million into London’s commercial real estate, accounting for 7 per cent of total investment during that period. This adds to the $5 billion invested by Middle East commercial investors in the city throughout 2015.
The report highlights that New York is the second most preferred city for investment, with 5 per cent of respondents identifying the American city, which has historically been a popular destination for both institutional and private investors from the GCC.