Property Week – Middle Eastern investors still hot for UK property

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90 North has completed two UK deals totalling £65m on behalf of Middle Eastern clients, as it reports rising demand from private investors in the region despite concerns over the falling oil price.

The specialist in Shariah-compliant real estate investment has acquired a Morrisons and Travelodge developed by Land Securities in 2014 in the centre of Crawley for £42.5m at a blended yield of 5.75%. The property at 100 High Street has a weighted average unexpired lease term of 15 years and was bought with debt financing from Deutsche Pfandbriefbank. In the other deal, the firm bought the Riverside East office building in Sheffield for £23.4m from Caudwell Properties, with financing from Santander, at a yield of 6.75%. It is let in its entirety to UK law firm Irwin Mitchell until 2027.

90 North worked with Kuwait advisers Arzan Wealth and Saudi Arabia-based Sidra Capital to source the capital for the deals. Nick Judd, founder and head of investment at 90 North, said the plummeting oil price, which dipped below $28 (£19.74) a barrel this week, was not affecting private investors in the Middle East in the same way as sovereign wealth funds.

While government sources of capital are under pressure to redeploy funds from abroad to prop up their economies, private investors are increasingly looking overseas for safer investments.

“A lot of people are misreading the situation by thinking that money is steaming back,” he said. “Government-backed investors are sending some money back, but private money continues to seek safe havens. We see property as very attractive to international investors right now and significant sums of money are looking for a home.”
Picton Jones Asset Management advised the buyer and Edgerley Simpson Howe the vendor on the Crawley deal, and RY Partnership acted for the purchaser and Lewis Ellis the seller to complete the Sheffield deal.

Article from Property Week