Could iran become a "major force" in london real estate?
Iran could become a "major force" in London's real estate market, according to industry experts.
It is a claim that would have seemed preposterous not that long ago, but the start of 2016 saw a landmark deal between the European Union and Iran. Earlier this month, the International Atomic Energy Agency confirmed that the nation had scaled back its nuclear plans and technology in accordance with an agreement signed last year, placing Iran more than 12 months away from having enough weapons-grade uranium for a nuclear bomb. As a result, the EU lifted its economic sanctions against Iran, which will allow money to be transferred into the UK and other countries, with $100 billion of frozen assets unlocked.
Now, agents and advisers are now forecasting a surge in interest from Iranian investors in UK property.
"That is a lot of extra money floating around and needing to be invested in something. And that ‘something’ is bound to at least in part be the London market," says Jennet Siebrits, Head of Residential Research for CBRE.
Siebrits predicts that Iranians will look at both commercial and residential opportunities within the capital, adding that Iran could become a "major force in the London residential market", both through funding projects and buying homes.
Faisal Durrani, head of research at Cluttons, told the FT last year that they had already been contacted by Iranians wanting to be ready for the rule Change.
"They want to understand the market as soon as possible for when they are allowed to invest abroad," Durrani told the publication. "They want an asset that isn’t in the [Middle Eastern] region, and they are drawn by the strong capital values and the growth story."
"Some of them are concerned about the government changing direction in a few years’ time, and that sanctions could return. It’s a form of insurance policy, an international bolt hole."
The reports follow a decline in Russian investment in the UK, following the collapse in the rouble. With China's economic woes also potentially weighing on Chinese investors' future confidence, the arrival of Iran in London's prime property market could prove perfect timing. Indeed, Durrani says that the Iranians were interested in homes worth between £2 million and £5 million.
Becky Fatemi, the Iranian managing director of estate agency Rokstone, told The Telegraph that they anticipated a 25 per cent rise in Iranian buyers by the end of 2016, although the increase would be compared to a very low base number.
Fatemi predicted that luxury properties in London and the home counties would be on their shopping lists.
"The grandparents and older generation still remember, so buyers will look – as they did in the 1960s and 1970s – at Knightsbridge, Mayfair, South Kensington and St Johns Wood," she commented.
Developers, meanwhile, are already considering ways to attract the new big buyers on the block.
"We're doing a luxury, 2,700sqft flat in South Kensington and have had some great advice how to configure the layout to appeal to non-British buyers," wrote Nicole Bremner, Senior Member of East London-based property developer East Eight, in a company blog post.
"We'll do a bit more research about tapping this middle Eastern market."