Although property in London remains a firm favourite with UAE-based investors, the latest Global Real Estate Outlook, by IP Global, an end-to-end property investment company, has shown that investors are now exploring the UK’s regional cities of Manchester, Birmingham and Liverpool due to their high rental yields and capital growth.
The UK’s regional cities are making a compelling investment case, as their steadily growing economies and populations have led to rising house prices.
New cities within Europe, such as Lisbon and Stockholm as well as Dusseldorf and Frankfurt in Germany, have featured in the report as attractive investment opportunities.
Richard Bradstock, Head of Middle East at IP Global, commented: “In the Middle East, we have experienced a shift in investor behaviour. …factors like its chronic housing deficit and the government’s increased spending on infrastructure, mean that the city remains appealing as property prices continue to rise.”
He added: “UAE residents are looking for more affordable options, with greater returns over a five to ten year period, and are now exploring regional cities and the commuter belt of London.”
Outside of the UK, IP Global is championing cities within Central and Western Europe that are now thriving with the boom of entrepreneurship and the eruption of start-ups.
The Global Real Estate Outlook revealed Outer London as a solid global investment choice. The launch of the Elizabeth Line (Crossrail), the massive infrastructure investment that will transform the city by carrying 200 million passengers annually, will drive growth across the capital.
Property prices along some parts of the Crossrail route are predicted to rise by up to 20 per cent, as supply cannot meet demand.
Birmingham continues to thrive due to its 20-year Big City Plan, which includes a GBP1 billion (AED4.98bn) public sector investment designed to improve the cities transport and digital infrastructure, resulting in rents rising 24 per cent in Birmingham City Centre in the past 12 months.
Further north, Manchester is becoming a popular choice for investors, as lower property prices make for a more affordable option. Still, property prices in the city are forecast to increase by 28.2 per cent from 2017 to 2021.
Germany is also catching the interest of UAE investors for a number of reasons – including the fact that there’s no capital gains tax on properties owned for ten years or more.
Hamburg, with its swelling population and $15bn (AED55bn) regeneration of HafenCity, has resulted in a 70 per cent house price growth since 2009.
Frankfurt, a global financial hub, is also experiencing a population and employment growth spurt, contributing to an average house price increase of approximately 40 per cent between 2009 and 2016.
Prolific technology hub, Stockholm, is being viewed as the next investment hotspot, as it produces more unicorn companies (private start-ups valued at more than $1bn) per capita than any other city in the world after Silicon Valley.
IP Global is cautiously approaching Lisbon, which, with its low cost of living, wealthy population and great lifestyle, is being touted as ‘The New Berlin’.
Although originally affected by the economic crisis, its government’s strategy to regenerate the city to attract entrepreneurs and property investors has meant that house prices have risen by 30 per cent between 2013 and 2016.