This week, Experience Invest has been exhibiting at Cityscape Global 2017, one of the year’s biggest and best property events, in Dubai. As one of the most prestigious dates on the property calendar, we found that Cityscape Global was the perfect platform on which to showcase our Aura Student and Infinity developments in Liverpool, engaging with potential investors in the Middle East.
It wasn’t all about just showing our properties, however. By talking to investors, we were able to gain some valuable insights into the market sentiment across the globe, and see what the future might hold for the rental sector. So, what did we learn about the shape of the property market at Cityscape Global? Here, we take a look at five exciting trends we uncovered.
Currency fluctuations make the UK more desirable
One of the secrets to making a strong return on investment as a property buyer is not only knowing where to purchase stock, but also when to do so. And this is something that buyers in the Middle East seem to be more than aware of at the moment when it comes to the UK.
A series of unexpected events in British politics, including a shock hung parliament and the Brexit vote, saw the UK lose 15 per cent of its value in a year against the dollar, as well as dropping against a number of other large currencies. Buyers from regions such as the Middle East have therefore been looking to invest while the UK’s currency fluctuations play into their hands.
The continued struggle of the pound means that anyone from a country with a stronger currency can get more for their money than they would have done in the past. A savvy investor is always on the lookout for such a reality, and at the Cityscape Global conference, we witnessed many who were looking at doing just this.
Student property is a popular alternative asset class
Student property has always been the niche asset class for investors when compared to mainstream residential rentals, but over the past few years, a combination of factors have made it into one of the most popular alternative assets around. And this year is no different.
At the conference, we learned that a high number of investors in the Middle East and Dubai are seeing student accommodation as the perfect place to spend their money. Evergreen demand, rising student numbers, enviable yields and a chance to put their money into a market that is backed up by one of the world’s most desirable places to study are just a few of the reasons student property has sealed its position as one of, if not the, most popular alternative asset classes around.
Luxury developments at the top of hit lists
The rental market in the UK has changed, and investors from Dubai and the Middle East appear to be very aware of this. In the last few years, the market has moved away from being home to those who could not afford to buy, and is instead now dominated by young professionals, for whom renting is a life choice rather than a necessity. It’s why the number of rented properties in the UK now tops five million.
For this demographic, the market is far removed from its position some years ago. Whereas we used to see the rental market as being full of low-quality homes, tenants now demand modernity, quality, and builds that are designed to meet their needs as busy young professionals who want to strike the perfect work-life balance.
This is something that investors are more than aware of when they come to buy property, and for this reason, we experienced strong demand for high-quality purpose-built homes at Cityscape Global. Investors want to appeal to the most dominant demographic in the rental sector, and they know just how to do it.
Brexit has had little impact on sentiment
When the UK surprised everyone and voted to leave the EU, there was doom and gloom across the country, with experts predicting that businesses would leave the country, that changes to our agreements with Europe would mean big economic changes, and that the uncertainty would mean many people looking to leave their investment sentiment for the UK behind.
But we have found since the referendum, and particularly at Cityscape Global, that this is actually not the case at all. In fact, the lower value of the pound, at present, coupled with the fact that investors trust the UK’s property market to weather the storm, as it has done previously with the global financial crisis, means that people are still as keen to spend in the UK.
Those from the Middle East are, in fact, increasingly intent on buying UK property as they see the potential to make strong, and initially guaranteed returns from their spend, taking over from Far Eastern and Eastern European buyers as some of the most prominent in the market.
Fully managed investment options attract buyers
Finally, we’ve also discovered at Cityscape Global that what many investors from the Middle East want is something easy that doesn’t take up too much of their time, but still allows them to make a fantastic return on their investment.
Managing a property portfolio in any country can be difficult, and it can be even harder when you live thousands of miles from where your properties are. Dealing with tenants, rent, maintenance and repairs, can be a difficult ask for anyone, and those who are time poor find that they just can’t do it. This is why we’ve seen far more people look towards the benefits of fully managed investment options.
These alternatives allow people to make a much more passive investment, buying assets for their portfolio, and then allowing a property management company to take the reins on the day-to-day tasks. This means that even though they don’t want to be hands on, they can still enjoy all the benefits of getting on board with the thriving rental market, and make a strong return.