Arab property buyers in London look beyond W1 postcode

Arab property investors in London are looking further afield. (Reuters)
Updated 23 January 2018

Arab property buyers in London look beyond W1 postcode

LONDON: London’s upmarket residential districts such as Belgravia, South Kensington and Chelsea have long been a favored destination for Middle East investment.
But a report from London-based property consultants Cluttons suggests that international investors might do better in future to buy in less well-known fringe areas of the city such as Maida Vale, East Dulwich, Greenwich, Canada Water and Hammersmith. All are seen as emerging residential hotspots that are likely to attract more incomers and, in due course, better returns for investors.
“The top five hotspots identified are most likely to attract investments and residential migrants, not least due to their relative affordability, compared with prime central London locations,” said Faisal Durrani, partner and head of research at Cluttons, which produced the report, Residential Mobility in London, jointly with University College London.
With housing affordability a growing problem and average house prices in many areas of London out of the reach of many buyers — house prices in Kensington and Chelsea stand at almost 50 times annual median incomes — younger workers are letting rather than buying. Increasingly, young professionals are renting larger homes through shared tenancies in areas with good access to their workplaces.
House prices in central London have risen by more than 250 percent over the past 20 years and a ripple effect has inevitably boosted demand and prices in areas beyond the central core. Using spacial interaction models, the Cluttons report identified 47 housing submarkets and looked at key themes such as connectivity, population density and affordability as well as the socio-economic status of residents and house price trends.
It found that in expensive areas such as Mayfair and the City of London, residents tended to stay put, with high prices discouraging both inward and outward migration. But those aspiring to move to more desirable areas are often attracted to nearby districts.
Interest in Maida Vale, which is close to the prime areas of the West End and where the average house price is £1.3 million ($1.8 million) has spiked in recent years as it seen as offering good value compared with nearby areas such as Marylebone or Hyde Park, where house prices average £2.3 million. According to the report, Maida Vale is likely to continue to appeal to aspirational households.
Affordable locations such as East Dulwich (where the average house sells for £680,000), Greenwich (£495,000) and Canada Water (£841,000) emerge as the top three most attractive submarkets in the report, in that order. They offer good transport links, lower house-to-income ratios and are the most likely to attract residential migrants seeking to move on to the next rung of the property ladder. Maida Vale (with an average transacted value of £955,000) and Hammersmith (£1.28 million) are also set to remain attractive.
Other factors also come into play. In Blackheath in southeast London, a relatively low population density and good transport links have helped push up house prices by 30.5 percent in the past seven years, compared with 17 percent in prime central London.
For now, the prospect of Brexit does not appear to have deterred Gulf investors from the capital. “London remains the most preferred location for investment among Middle East family offices owing to factors like close trading links that date back to the 1800s, around 39 direct daily flights from the Gulf and a 175 percent rise in capital value in the past 20 years,” said Durrani. “For Middle East investors, the circa 15-18 percent decline in the value of sterling since just before the Brexit referendum has aided London’s appeal. This trend is likely to continue into 2018.”
Brexit also pales in comparison with some of the issues facing Middle Eastern investors closer to home and as taxes rise in the wake of the fall in the oil price. “The need for Middle East investors to identify asset classes which generate stronger returns has never been more pressing,” said Durrani.
Other agents in London have also seen investors looking beyond the center. “We’ve started to see more interest in areas a bit farther from prime central London such as Fulham and Battersea where the pound per square foot is more favorable,” said Frances Clacy, research analyst with Savills Residential. However, over the next five years, Savills is forecasting prime central London prices will outperform the outer market which it sees as more dependent on domestic buyers and potentially exposed to Brexit.
Savills recently identified northeast London as one of the most affordable parts of the capital, which is benefiting from new infrastructure such as the Crossrail link and has the potential to deliver thousands of new homes in the next few years. Areas such as Newham, Waltham Forest, Barking and Dagenham, Havering and Redbridge are experiencing growing demand from buyers priced out of more central, expensive locations.


UAE-based companies turn to Bangladesh to build their ships

Updated 55 min 37 sec ago

UAE-based companies turn to Bangladesh to build their ships

  • Vessels worth $160 million were exported by the South Asian country last year

DHAKA: At present, Bangladeshi ships are being exported to around 12 countries in Asia, Africa and Europe.

“Made in Bangladesh ships have a huge potential in India, Pakistan, Saudi Arabia, the United Arab Emirates (UAE), Norway, Sweden, Denmark, Finland, Italy, Germany and some African countries. Now, our focus is to have more orders from different international buyers and Bangladesh government is also formulating the policies for this export oriented industries,” Dr. Abdullahel Bari, president of the Association of Export Oriented Shipbuilding Industries of Bangladesh (AEOSIB) told Arab News.

Bari, who is also the chairman of Ananda shipyard, said that the country has more than 100 shipyards which produce different kind of ships for the local and international markets. Of them, 12 large shipyards have the capacity to meet the demand of the international market. He said that Bangladesh will have a “golden period” in the next five years in the ship-building sector with both the government and private sector investors keen on exploring new opportunities.

“If everything goes according to the plan, our export earnings from shipbuilding will exceed the benchmark of $1 billion per year within the next five years,” Bari said.

He added that, as a Muslim nation, Bangladesh enjoys goodwill in the Middle East especially in Saudi Arabia and the UAE.

“To bag the opportunities in the Gulf countries, from now onwards, we should have more active participation in different marine fares in Saudi Arabia and UAE,” Dr. Bari said.

FASTFACTS

• At present, Bangladeshi ships are being exported to around 12 countries in Asia, Africa and Europe.

• Ananda Shipyard began exploring the European market by exporting a multi-purpose cargo vessel to the Germany.

• Bangladesh’s export earnings will exceed the benchmark of $1 billion per year within the next five years.

UAE-based shipping company Al Rashid shipping is already in talks with Bangladeshi shipbuilders to source its ships, with Western Marine Shipyard Limited (WMS) – one of the leading shipbuilders in the country – securing orders for the construction of two oil tankers worth $6.8 million. 

“With government support, shipbuilding could play an important role in export diversification. The main challenge for this sector is arranging working capital for projects. If banks and financial institutions come forward in supporting this sector, we can secure more orders from local and foreign buyers,” Saiful Islam, WMS Chairman, said. The shipbuilding company is expecting more orders from the UAE market after the successful delivery of these oil tankers.

“According to our capacity, Bangladeshi shipbuilders can only concentrate on building medium-sized vessels which is within 15,000 Dead Weight Tonnage (DWT) capacity and various utility vessels like OPV, TUGS, offshore vessels, survey vessels, inland container vessels, multi purpose cargo vessels, survey vessels, landing crafts, ro-ro ferries, passenger ships,” Captain Sohail Hasan, managing director of WMS told Arab News.

In 2017, Western Marine also exported one Landing Craft namely “Ajman Trans” to the same company making it the 43rd ship to be exported from Bangladesh.