Saudi and Kuwaiti money returns to London property despite Brexit

The glamor and history of London continue to appeal to international investors. This year saw Gulf-based investors renew their interest. (Reuters)
Updated 30 April 2019
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Saudi and Kuwaiti money returns to London property despite Brexit

  • Preliminary data for the first quarter has seen two transactions worth almost $171 million put Saudi Arabia and Kuwait back on the London commercial property investment leader board
  • Taking into account the UK’s planned departure from the EU, Knight Frank expects the central London commercial property market to remain robust

LONDON: Property broker Knight Frank estimates there is as much as £40 billion targeting real estate assets in London this year despite a sharp retreat by Gulf-based investors in 2018.
Preliminary data for the first quarter has seen two transactions worth almost $171 million put Saudi Arabia and Kuwait back on the London commercial property investment leader board for 2019.
Taking into account the UK’s planned departure from the EU, which has dented confidence in some property sectors, Knight Frank expects the central London commercial property market to remain robust and supported by strong letting demand for prime property.
That was supported by a record letting this week when 37-year-old hedge fund boss Ravi Mehta agreed a £250-a-square foot rent for an office in Mayfair to be occupied by his firm, Steadview Capital Management.
“Despite the uncertainty thrown up by Brexit, there are bigger macro political considerations that are helping to cement London’s position as the number one global property investment destination,” said Faisal Durrani, an associate at Knight Frank.
“During 2018, the city beat other major global gateway locations including New York, Tokyo, Paris and Singapore, claiming the crown for the largest volume of commercial property investment globally, which amounted to £16.2 billion. This is on par with the level recorded in 2017, highlighting the depth of demand for London’s commercial assets.”
However Gulf investment fell sharply last year.
“For those from the Gulf, investment volumes, as always, remain volatile, with Bahrainis and Qataris committing $39.5 million and $471 million last year, which was up 125 percent and 34 percent, respectively, on 2017, according to RCA,” said Durrani.
While 2017 saw just over $2 billion spent by GCC investors on London commercial assets, this figure fell to just over $1 billion in 2018, with investment from the UAE down most notably by 88 percent to $132 million.


China opens up finance sector to more foreign investment

Updated 20 July 2019
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China opens up finance sector to more foreign investment

  • China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020
  • Beijing has long promised to further open up its economy to foreign business participation and investment

BEIJING: China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the US.
China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, a year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.
Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves — a major point of contention with Washington and Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar Liu He where policymakers focused on tackling financial risk and financial contagion and pledged new steps to support growth, according to a state council statement.
Additional measures include scrapping entry barriers for foreign insurance companies like a requirement of 30 years of business operations and canceling a 25 percent equity cap on foreign ownership of insurance asset management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt to force Beijing to further open up its economy and limit what he calls its unfair trade practices.
The US and China have hit each other with punitive tariffs covering more than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29 and top US and Chinese negotiators have held phone talks this month.