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Surge in Middle East buyers seeking trophy property assets in London

There has been a 100% growth compared with 2010 with 60% of investment coming from the United Arab Emirates and 40% from Asia Pacific, the latest report from IP Global, a leading property investment company specialising in securing prime buying opportunities, shows.

London offers the kind of trophy assets traditionally required by the Middle Eastern investor and that is another reason that overseas property investors now account for 48% of all prime central London property purchases.

This signals a positive outlook for London’s property market, as it accounts for nearly 100% growth on IP Global’s 2010 figures. Demand for London property and especially its trophy assets of Belgravia, Knightsbridge, Mayfair and Chelsea have traditionally been a key requirement for investors from the GCC, and IP Global predicts that Central London will continue to lead the pack in terms of growth throughout 2011.

 As well as having the requisite prestige factor, IP Global also notes that London also offers an attractive environment in which to  de risk during the current period of turbulence in some areas of the Middle East, and rising inflation in Asia.

The report says that London has a sound economic and political infrastructure, mature legal frameworks and solid growth potential, whist maintaining a key stake in the global financial services sector. Another appealing factor is that Central London rents are currently at an all time high, and investors can expect an approximate rental yield of 4 to 6%.

‘London has emerged as one of the top property investment hotspots in the world, especially for Middle East investors. While London has always been a prime property market, factors such as the recent unrest in some parts of the Middle East and the rising inflation in Asia have added to London’s appeal as a preferred investment destination for potential property buyers. London has seen a strong start to the year and we expect this to carry on through 2011,’ said Tim Murphy, chief executive officer of IP Global.

IP Global also points out that despite this strong demand, there is a fundamental shortage of supply, given that many of London’s finest properties are listed and protected from future development. As a result newly built housing is being absorbed quickly into the market and premiums are being achieved above local embedded value.