Middle East and North African (MENA) investors are making their first market investments in the European hotels sector, including cities such as London, Liverpool, Edinburgh and Glasgow, according to Savills.
The global real estate services provider firm found Middle Eastern investors have invested £3.45bn into Europe (including the UK) in 2016, £5.39bn in 2017 and £4.84bn in 2018 as the European hotel market is seen as a “safe haven” for investment with real estate offering “steady returns”.
Nick Newell, director in the Savills hotels team, said: “On the one hand lower oil prices have impacted some major MENA investors who have typically been the sovereign wealth funds. In addition to this, Brexit uncertainty has had a ‘stalling’ effect on UK market investment recently; their traditional preferred investment location.
“However, despite the uncertainty, the fall in the pound due to the Brexit vote in 2016 has countered this and has made sure that the UK remains a viable option, creating an opportunity for a wider international investor pool including more private, high-net-worth individuals and family office investment from the region such as the Select Group and Lu Lu / Twenty14 Holdings investing in the European hotel sector, a trend we expect to continue over the next 12 months.”