Will the 'Olympic effect' attract Gulf property investors to East London? (page 2 of 2)

Stratford is home to a new Eurostar link, opening it to the whole of Europe, and other advancements include the Javelin high-speed rail line, which will whisk passengers from Central London to the Olympic Park in just seven minutes.

"It's certainly getting easier to take Middle East clients out to view properties in East London," says one London-based broker with clients from the UAE, Qatar and Saudi Arabia. "Even a few months ago they wouldn't have been interested in looking anywhere but Central [London], but now you mention the Olympics and tell them about Stratford International [rail terminal], and they are happy to take a look.

"These [investors] are not necessarily the high-net-worth clients we are used to seeing in Knightsbridge or Westminster, but families or smaller investors looking for a second or third residence, or even somewhere to let out," he continues. "It's a different part of the market, but an important one nonetheless."

While super-wealthy Middle East investors are unlikely to have their heads turned by tales of much-improved rail links, buyers from the region looking for considered long-term investments, as opposed to a luxury residence in the leafy environs of Mayfair, are expected to examine the opportunities presented by East London. They would, however, do well to ignore the hype surrounding the Games, and look past the so-called 'Olympic Effect'.

"The key danger is for investors to be led by the Olympic story, which is ultimately a finite story," warns Pearce at IP Global. "If you're buying a property you're not going to do it just for a couple of weeks to get some yield from the Olympics, you've got to make your decision based on the long-term fundamentals of the market, not just what the Olympics will bring.

"When you look at past Olympics, it wasn't that long ago that the Games were being held in Athens," he notes. "I'm not saying that the Greek financial crisis is being driven by the Olympics, but the fundamentals of the Athens property market were unsustainable despite the Olympics. From an investment point of view, the [East London] area will gentrify in the long-term, but the Olympics should not be the answer to that. There are much more important long-term fundamentals."