Bahraini investors are eyeing UK real estate to make the most of a “window of opportunity” created by the weaker pound.
Majed Al Kahn, chief executive of the real estate division at Bahrain-based investment bank GFH, said this week that “historically closed” investors in the country were now targeting the UK as they look to expand their local portfolios.
He added that GFH and other Bahraini private investors and institutions were looking at UK opportunities in the wake of the triggering of Article 50 as the weak pound has resulted in an influx of Middle Eastern capital.
He said: “I am looking at assets in London now. There is a window of opportunity as I think the pound will get stronger again soon. But I have never seen more money flowing from this region to the UK than I have in the last few months.
“The Bahranis are usually very closed but since the Brexit vote everyone I know here is looking to buy in the UK; individuals and banks.”
Al Kahn added that, unlike other countries in the region, Bahraini investors would be less likely to target trophy assets, focusing instead on safe, secure properties with long-term return potential, such as student accommodation and mid-range residential.
“There are countries in the GCC like Qatar that are focussed on the trophy and high-profile assets,” he said. “Bahrain is more interested in long-term investment, steady growth, more realistic exit values and is not so aggressive in terms of valuation.”
He said that Manchester also remains an attractive UK market due to strong transport links.
The Bahraini interest in UK property follows announcements in March that Saudi family Sidra Capital is set to invest £1bn in prime central London and that Qatar plans to invest £5bn in the UK over the next three to five years targeting energy, healthcare, infrastructure and IT services.
Harry Goodson Wickes, head of Bahrain for Cluttons, said: “Bahrain is at an exciting turning point. There are a number of infrastructure projects under way or planned, such as redevelopment of the airport, port facilities and upgrades to the causeway linking Bahrain to KSA, Bahrain’s largest tourism market. This infrastructure investment will also help build on the success of Bahrain as a key logistics hub in the region. In addition to this, Bahrain is in the process of positioning itself as a world class family holiday destination – there are five five-star hotels currently under construction.
“Bahrainis are now fully aware of the great window of opportunity to invest in the UK whilst the sterling is weak. There has been increasing evidence that cities of the Northern Powerhouse are becoming better understood, and therefore attention has turned to opportunities here – there was little appetite 12 months ago.”
Middle East Real Estate Forum: Watch the debates, read the analysis >>
To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette
