It’s anticipated that investors from the Middle East will inject £2.4 billion into the UK’s real estate sector in 2024, taking advantage of its increasing affordability and the growing interest in student accommodation, as per the London-based Bank of London and The Middle East (BLME).

BLME highlighted that the economic robustness of the GCC, coupled with a desire for asset diversification and an interest in university-related properties, are the primary factors driving this expected investment.

The bank also noted that those advising and working with BLME foresee the purpose-built student accommodation asset class experiencing the most substantial investment growth in 2023.

The enduring appeal of UK educational institutions for Middle Eastern students, along with a low tenant failure rate, makes it an enticing prospect for investors, the release stated.

“With a perfect storm of strong dollar-pegged GCC currencies, surplus cash from last year’s oil boom, and falling UK asset prices, Middle Eastern investors have a golden chance to spot a bargain while property prices are low,” said Andy Thomson, the head of real estate finance and investments at BLME, in a press statement.

In 2022, both Saudi Arabia and the UAE were among the top 10 non-EU countries sending students to study in the UK.

The UK’s inflation rate has pushed domestic mortgages to their highest level since the 2008 global recession, leading to reduced demand, which could ultimately result in a drop in property prices.

The report also highlighted that London remains the most favoured destination for GCC investors in the UK, but they are also considering other cities such as Manchester, Birmingham, Newcastle, and Bristol.

In January, a report from real estate firm JLL confirmed that the interest of Middle Eastern investors in global property markets is expected to grow amidst global economic challenges.

“The readiness of investors to seize discounted buying opportunities will continue to emerge in the face of the uncertain economic outlook in Europe and the US and moderated competition in bidding,” said Fadi Moussalli, JLL’s executive director of International Capital Coverage at that time.