The British economy has seen much upheaval in recent months, but even as the UK grapples to get out of its second slump in three years, its capital continues to be the envy of the world with 125 prime residential developments under planning or construction, presenting an opportunity for Arab real estate developers.
Some fifteen thousand new high end units are expected to come on the London real estate market in the next ten years, according to a new report, representing a 70 percent increase in square footage to last year's figures, and confirming the city’s global status.
“I think it’s re-affirmation of London’s profile, in terms of its international importance as a place to invest, to live, and to work -- and of course the fact that so much of the pipeline is underpinned by foreign investment shows the market here is truly global,” says Mark Farmer, Head of Residential at property consultancy EC Harris.
The latest report by EC Harris on prime residential developments in London estimates an excess of £38 billion of them are on the way, peaking in 2016. However, there are also questions about sustaining this unprecedented of international investor and sales demand, the report says.
High profile residences in central London such as One Hyde Park, The Lancasters and The Shard are now complete and nearly sold out, so developers are feeling the pressure to step up construction to meet demands of overseas buyers. But experts say that with almost 40 billion pounds needed to future projects, it will not be easy to secure funding.
Also, the pace of construction will need to increase up to 10 times to keep up with the rising demand. Which is why experts say this presents an opportunity for Arab developers to enter the London property market, providing they have the right expertise.
“It’s not open to all. Companies with the right expertise, firms that are aware of key issues around prime and luxury residential in London from a development and construction perspective (have an opportunity) to enter the market,” Farmer says.
(Carina Kamel is a Senior Correspondent for Al Arabiya in London and can be followed on twitter @Carina_bn.)