GCC Investors Increasingly Turn to London Property

High-net-worth individuals (HNWIs) from the Gulf Cooperation Council (GCC) are significantly ramping up their investments in London real estate. This trend is driven by attractive market conditions and a growing appetite for value-driven opportunities.

Rising Interest in London Real Estate

Recent findings from the GCC Investment Barometer, published by AlRayan Bank, reveal that 29% of investors from Saudi Arabia, Qatar, and the UAE have invested in London property over the past year. This figure positions London ahead of other major cities like New York, Paris, Los Angeles, and Tokyo, which saw investment rates of 23%, 23%, 22%, and 21%, respectively.

Investor Confidence on the Rise

The survey, which included 150 investors each possessing at least £10 million ($12.2 million) in wealth or assets, indicates a robust outlook for the UK property market. An impressive 99% of respondents plan to increase their investments over the next five years. The sectors attracting the most interest include retail properties (44%), hospitality and leisure (36%), and student accommodation (34%).

Investor confidence has notably strengthened, with 93% of participants reporting increased optimism in the UK market over the past year. This positive sentiment is bolstered by several factors, including five base-rate cuts by the Bank of England, declining prices in prime London areas such as Mayfair, Chelsea, Westminster, and Belgravia, and a persistent housing shortage that continues to enhance rental yields.

Factors Driving Investment Decisions

Several elements contribute to the appeal of London property for GCC investors. Visa-free travel for nationals from the GCC and the UK’s relatively low 24% Capital Gains Tax are significant incentives.

Maisam Fazal, Chief Commercial Officer at AlRayan Bank, notes that the primary question from GCC investors has shifted from “where to buy” to “how to execute quickly and effectively.” He emphasizes that clients from Saudi Arabia and the broader region are increasingly focused on securing the right opportunities through structures that align with their values and governance frameworks.

Tailored Investment Solutions

AlRayan Bank is responding to this demand by offering Sharia-compliant club deals, off-market transactions, and partnerships with established operators to ensure immediate performance. There is also a growing interest in sustainable investments, and the bank is committed to providing tailored solutions that safeguard long-term value.

Varied Confidence Across the GCC

While the demand for London property is strong across Saudi Arabia, the UAE, and Qatar, investor confidence in financial services varies significantly. In Qatar, 78% of investors feel that services—especially those supporting international investments—are well-suited to their needs. In contrast, only 52% of UAE investors share this sentiment, and just 40% of Saudi investors express similar confidence, despite their commitment to high-value deals. Notably, 32% of Saudi investors plan to invest $100 million or more in the next five years.

The report highlights existing gaps in Saudi Arabia regarding private banking and structured wealth solutions. However, younger, tech-savvy investors are driving change, showing increased interest in long-term, Sharia-compliant strategies. AlRayan Bank has reported significant growth in business originating from Saudi Arabia, with Home Purchase Plan Premier volumes rising from 16% in 2020-21 to an anticipated 69% by 2025.

Expanding Investment Horizons

Investor preferences are evolving beyond central London. While the heart of the city still attracts the largest share of investments (38%), areas like East London (36%), the suburbs (33%), and North London (29%) are gaining popularity due to ongoing regeneration projects and transport improvements.

Outside of London, GCC investors are also broadening their focus. The AlRayan Bank survey identifies Liverpool as the top regional hotspot for the third consecutive year, followed by Cardiff, Brighton, Birmingham, and Edinburgh.

Key Investment Drivers

Returns and rental growth remain the primary motivators for investment, with 57% of respondents citing these factors. Favorable purchase terms also play a crucial role, with 56% of investors highlighting this aspect. Sustainability is increasingly important, with 95% of investors considering green credentials in their decision-making processes.

Fazal emphasizes that clients across Saudi Arabia, the UAE, and Qatar are honing in on London and select strong regional cities in the UK. They are prioritizing transparent markets, stable income, and long-term capital growth, all of which the UK continues to offer. AlRayan Bank has established strong, trusted relationships in Qatar and the UAE and is now expanding its presence in Saudi Arabia, marking an exciting new chapter in its journey.