Middle East property investors shrug off Brexit blues

The UK capital London is still seeing strong interest from Middle Eastern property buyers despite Brexit. (REUTERS)
Updated 19 February 2018
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Middle East property investors shrug off Brexit blues

LONDON: The UK capital is still seeing strong interest from Middle Eastern property buyers, even as politicians in Westminster wrangle over Brexit.
The lure of safe-haven London remains high, and is expected to strengthen rather than decrease, brokers said.
Arab buyers are lured by currency weakness, the decline in prime central London prices and robust domestic demand for homes.
As war and political upheaval roils much of the Arab world, the safe haven appeal of London remains strong.
“For people from the Middle East or Asia, looking at the UK as a safe haven investment, it is still a very safe bet, and compared to their own markets, it’s still very, very safe,” said Faisal Durrani, the head of research at the Cluttons property consultancy.
Investors from the Middle East spent $1.8 billion on commercial property in London between April 2016 and April 2017, according to CBRE data.
The lure of London is underscored by investment into second-place New York, which attracted just $884 million over the same period.
Property specialist Rupert Bowen-Jones of READ Advisors, which works with wealthy Arab buyers, said that London’s attractiveness to overseas investors has not changed.
However, some investors are more interested in putting their money into the secondary residential market, rather than into off-plan purchases.
“We have witnessed more Middle Eastern buyers seeking to acquire residential property in need of refurbishment, which is available for a much lower price, and therefore with a much lower tax bill to be settled.
“The buyer then typically refurbishes the property to their own standards and ends up with a bespoke solution for less money than if they had bought a finished product from a developer,” Bowen-Jones told Arab News.
Investing in this way can also open the door to tax advantages, such as the reduction of VAT payable when properties are renovated after two years of being vacant, under the Urban Regeneration Scheme.
“There are few Middle Eastern buyers who cite Brexit as an issue, rather they view it as an opportunity, as weakness in the market has meant there are better deals around, and the currency has been at their back to provide additional value,” Bowen-Jones added.


EU to respond to any US auto tariff move: report

Updated 23 June 2018
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EU to respond to any US auto tariff move: report

  • Trump threatened to impose 20 percent tariff
  • Shares in carmakers slip on trade war fears

PARIS: The European Union will respond to any US move to raise tariffs on cars made in the bloc, a senior European Commission official said, the latest comments in an escalating trade row.
US President Donald Trump on Friday threatened to impose a 20 percent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.
“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.
“We don’t want to fight (over trade) in public via Twitter. We should end the escalation,” he said in the comments published on Saturday.
The European Autos Stocks Index fell on Friday after Trump’s tariff threat. Shares US carmakers Ford Motor Co. and General Motors Co. also dropped.
“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump tweeted.
The US Commerce Department has a deadline of February 2019 to investigate whether imports of automobiles and auto parts pose a risk to US national security.
US Commerce Secretary Wilbur Ross said on Thursday the department aimed to wrap up the probe by late July or August. The Commerce Department plans to hold two days of public comments in July on its investigation of auto imports.
Trump has repeatedly singled out German auto imports to the United States for criticism.
Trump told carmakers at a meeting in the White House on May 11 that he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States.
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported US cars.
The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major US and foreign automakers has said it is “confident that vehicle imports do not pose a national security risk.”
The US Chamber of Commerce said US auto production had doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.”
German automakers Volkswagen AG, Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state.
The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of Volkswagen’s VW brand sales and 12 percent of its Audi brand sales.