UK delegation seeks to ink investment deals in UAE

Trade between the Gulf and the UK was worth $33 billion in 2014.

Abu Dhabi, 18 April 2017, The Khaleej Times - A government-led delegation of UK investors and developers is arriving in the UAE as part of a drive to lure more investors to the post-Brexit country to build on bilateral investment and trade ties.

The delegation, led by Sir Edward Lister, who is the chairman of the government's Homes and Communities Agency, will attend two set-piece events designed to reinforce investment and trade links between the UK and the Gulf as total international investment into the UK from the Middle East topped Dh15.1 billion in 2016.

Emiratis have always been strong investors not just in London, but also throughout the UK and we have always welcomed that investment, said Sir Edward.

British Prime Minister Theresa May, addressing the 37th GCC Summit in Manama in December, said her government was determined that the UK and the Gulf would "build a bold new chapter in our co-operation". The trade and investment relationship between the UK and the Gulf is already significant, with bilateral trade in 2015 worth more than £30 billion.

In Manama, the six members of the GCC and the UK agreed to establish a GCC-UK Strategic Partnership to foster closer cooperation in the fields of politics, defence, security, development and trade.

Already, the UAE-UK Business Council has started to work towards an ambitious new goal of £25 billion annual trade by 2020.

Oxford Business Group (OBG), quoting former British Prime Minister David Cameron, said the new trade target was set after the council reached its earlier objective of £12 billion annual trade two years ahead of schedule.

"Trade between the Gulf and the UK was worth $33 billion in 2014 - more than our trade with India or China. The UAE is our 14th biggest export market. In spite of Brexit, the underlying property dynamics in the UK remain unchanged. The demand for all types of property is enormous. The UK government target for housing is 250,000 homes a year. In a good year, we are only achieving 170,000. So, the pressure is on for housing across the country and we need with that modern office accommodation as well as industrial and distribution warehousing," Sir Edward said.

While Middle Eastern investors have traditionally been drawn to residential property in London, the Dh18.4 billion top-up this month of a Dh229.5 billion real estate and infrastructure investment portfolio in the UK owned by the Qatari government shows that the appeal stretches even further.

"In a country where property is so well-protected by rule of law, the UK always makes a sound investment," said Sir Edward, who is also the former deputy mayor of London.

Trade between the UK and the GCC has soared by 185 per cent between 1999 and 2015, with the UAE emerging as the UK's third largest export partner outside Europe and the 11th largest trading partner for the UK overall. In the wake of Brexit, the UK's international relationships are expected to be bolstered further.

Faisal Durrani, head of research at Cluttons, said London residential property is a favourite asset class among the region's wealthy. "London's nickname as the 'eighth emirate' is further substantiated by the tremendous volume of investment it attracts from the Middle East and the GCC states in particular."

"As well as Qatar's multi-billion-dirham investment into the UK, Kamco of Kuwait and Rasmala of Dubai recently completed a Dh248 million deal to acquire an Amazon distribution warehouse near Edinburgh that is responsible for three of eight Amazon parcel deliveries in the UK. Abu Dhabi Investments acquired a Dh1.4 billion share of a shopping mall in Liverpool recently," said Durrani.

Sanjay Manchanda, chief executive of Nakheel, said: "There is a very attractive business model here in Dubai. Everybody needs a diversified portfolio to mitigate risks. If you compare Dubai prices with those in Hong Kong and Singapore, New York and London, they are very competitive and much lower. Today the returns on real estate in Dubai are around 5 to 10 per cent."

"While the UK will always be perceived as a safe harbour for investments, the dizzying speed at which cities in the Gulf have arisen are attracting the attention of the global investment community, particularly when you have mega projects like the $32 billion Al Maktoum International Airport in the making, along with ground-breaking new transportation infrastructure like 3-D printed skyscrapers and Hyperloop waiting in the wings to provide the next generation of economic growth," said Durrani.

Sir Edward, Manchanda and Durrani will speak at the Middle East Real Estate Forum, which includes two set-piece events designed to reinforce investment and trade links between the UK and the Middle East. The events are in Abu Dhabi on April 25 and Dubai on April 26. – The Khaleej Times

 

d : 18 April 2017