“London’s reputation as a safe haven for investors is being reinforced by global troubles not undermined. Additional incentives such as a weak sterling and a favourable tax system are also making it more attractive amongst a range of potential foreign investors”
Snapping up high-profile buildings on the cheap is not the priority for Gulf investors. London skyscrapers are attractive to them as long-term investments with an almost guaranteed income. Strife in the financial market may force some companies to cut back on office space for a while, but in the long-term these investments will probably pay off, said CBRE. Te Pinnacle, for example, a 66-storey office building financed by Arab
Investments and designed to have the highest restaurant in the city, is expected to be completed shortly. Construction started in 2008, then stalled, but Arab Investments took over and got the project moving in return for 90 per cent stake. Pierre Rolin, a London-based real estate investment adviser whose close
ties to the Middle East led to a $900 million investment by Oman in the Heron Tower, another skyscraper, is confident his clients will get a 20 per cent return on the investment this year. Meantime, Qatar Investment Authority, the country’s sovereign-wealth fund, has just bought Credit Suisse Group AG’s London headquarters and leased the building back to the Swiss lender. And Qatari Diar also bought most of Royal Dutch Shell’s headquarters
campus in London with Canary Wharf Group in July. Canary Wharf is controlled by Songbird Estates, in which Qatar Holdings owns almost a 28 per cent stake.
In 2010, Mohamed al-Fayed sold Harrods to the Qatari royal family’s
investment arm for £1.5 billion in one of the highest-profile sales in the UK for many years. Qatar also holds a 20 per cent stake in Camden Market in north London and owns Chelsea Barracks. “London continues to offer solid growth potential and its twinned status as an accessible capital city and financial centre, alongside a stable political system and transparent legal framework, continues to attract interest from across the Middle East,” Ben Stroud, associate director of residential agency, development & investment at Jones Lang LaSalle London, said in a statement. “London’s reputation as a safe haven for investors is being reinforced
by global troubles not undermined. Additional incentives such as a weak sterling and a favourable tax system are also making it more attractive amongst a range of potential foreign investors.” Middle East investors accounted for nine per cent of all Jones Lang
LaSalle’s sales in central London last year, up from five per cent in 2010, making them the second largest group of foreign investors behind nationals from Asia Pacific. Sport plays its part with probably the highest profile investment being Abu Dhabi United Group’s purchase of Manchester City football side. Plans include
a $158 million training complex adjacent to its home ground, Etihad Stadium. Etihad Airways also chose Manchester as the location for its European hub. Arsenal plays its home games at the spectacular Emirates Stadium. Half the top ten sovereign wealth funds — including Abu Dhabi Investment
Authority — have offices in London. A close working partnership has also helped secure Emirati funding for
major projects such as Europe’s largest wind farm, the London Array, and the UK›s most ambitious port and logistics centre, the London Gateway, near the mouth of the River Tames. Last year, a Qatari investment fund bought the naming rights for the inaugural British Champions Series, which will include 35 of the top flat races in the British horse-racing calendar including outings at Royal Ascot, the Derby and St Leger meetings. David Wootton, Lord Mayor of the City of London, on a recent visit to the
UAE, perhaps summed it up best when he said: “I do not doubt that 2012 will be a year of great challenge, for London, for the UK, for the UAE and for the world. But through our continued partnership we have the capacity to transform these huge challenges into an enduring legacy for both nations” l
APRIL 2012 I CITYSCAPE I 17
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