On brisk winter day in central London, the cavernous ballroom of the Park Lane Hotel is packed with a diverse crowd.
Clutching glossy brochures, they chat quietly among themselves in English, Arabic, Urdu and Chinese.
This is the afternoon session of Allsop’s first commercial property auction of the year, where everything from swanky offices to garages, corner shops to warehouses, from Newcastle to Brighton to central London will go under the hammer.
The buildings up for sale in these glitzy surroundings are hardly glamorous by global property deal standards. The first item, a restaurant in a popular south-eastern commuter town, goes for £1 million (Dh6.11m); the second, a block of rundown shops and flats in Finchley, North London, goes for more than £2m.
But the bidding represents a new confidence in the commercial property market as the UK economic recovery gets underway.
Meanwhile, the diversity of the buyers represents something else, the increasing internationalisation of not just the UK residential property market – but commercial property, too.
While Arabian Gulf investment in residential property in London may not be anything new, a recent report claims GCC investors – led by sovereign wealth funds in the UAE, Qatar and Kuwait – are also eyeing the commercial property market in the United Kingdom.
Four of the biggest deals in British commercial property last year came from the Gulf and Deloitte Real Estate estimates this year – when 6.6 million square feet of office space is expected to be delivered in London – the trend is only set to continue.
The July opening of the Shard, 95 per cent owned by Qatar, was undoubtedly the headline deal of last year, but there were others, too. St Martin’s Property Group – owned by the Kuwaiti government – bought 5 Canada Square in January for £383m while a Middle East investor bought IBM’s London HQ from Amsprop for £120m in September, according to Deloitte.
But concerns have been raised in Europe that rising demand for European property is driving prices up and leading to fears of a renewed property bubble. In London, commercial property prices hit a six-year high last year, according to a report by the Financial Times, with non-UK buyers making up 72 per cent of fourth-quarter transactions in the City of London and Docklands and 75 per cent in the West End.
There are notable differences in investment in commercial and residential property in the UK, many of which are attractive to overseas buyers at both the high and low end of the spectrum.
Whereas in the residential property sphere, British law tends to favour tenants over landlords, in commercial property it is the other way around. In addition, letting commercial space is inherently more simple than residential – tenants are long term, unlike the usually shorter-term leases of residential.
“Commercial is a sound investment in the UK because of the tenure,” says Robin Williamson, the property industry leader at Deloitte Middle East. “There is huge protection for landlords because of landlord and tenant legislation, and leases are long. So add those two together and it is almost a bond style investment category.”
This is especially true in London’s West End or the City, where most of foreign investment has been concentrated. Letting prime commercial space to a top tenant is a secure, long-term investment class, whether it is a top investment bank in Canary Wharf or a luxury store chain on Oxford Street.
Then there is demand, says Mr Williamson, which is kept strong not just because of London’s location as a global financial hub, but because of the UK’s strict planning regulations. There is only a finite amount of space in the city and, unlike Dubai or Abu Dhabi, developers cannot expand indefinitely into the surrounding area. As a result, the commercial “bubble” is unlikely to burst.
“The issue with London is it doesn’t get any bigger height-wise or width-wise because of planning, so it is unlikely that you will see mass oversupply,” Mr Williamson says.
Richard Divall, at Colliers estate agent in London, goes further. He feels the significant boom in UK residential property over the past 12 months is actually pushing more investors towards commercial. He does not think the commercial upturn is likely to slow any time soon.
“Residential values have highly out performed commercial over the last four years but I think we are now at the point where commercial values have caught up with residential and there are signs that the top-end residential market is slowing,” Mr Divall says.
He points out that a lot of the money chasing commercial stock in London is coming from overseas and, as a result, represents new money. “I don’t think we are going to see any reduction in any areas of London as the investors are paying these levels anticipating strong rental growth as the economy improves. Actually, I can see the commercial market showing better returns than the residential market in the next few years,” Mr Divall says.
Still, there has been speculation in London some of the more recent Middle East forays into UK commercial property have not yet come to fruition. The Shard, for example, has experienced problems finding office tenants despite the unique nature of Britain’s tallest tower.
“The Shard had hoped to attract more private equity and venture capital companies from the West End market but they have not been keen to leave Mayfair and compromise their high net worth individuals easy access to their offices,” says Mr Divall.
“However, the owners of The Shard won’t put themselves under pressure if they don’t want to, especially now that they have established a record headline office rent for the area with the letting to NewsCorp.” That agreement came in June, when NewsCorp – which owns a number of British newspapers – agree to let the Place, next door to the Shard, from this year and leave its base in Wapping after three decades.
Mr Divall also points out that the Shard is a mixed-use development in a new area of London, one that is likely to see more growth in the years ahead. Letting issues at the eye-catching building only relate to the office floors, with the restaurant, shops, hotel and visitor centre all already let.
As for criticism in some quarters that Gulf investors in London are merely throwing their money around, Mr Williamson is dismissive. “I think the Middle East investors are very savvy in most cases, in most cases they are well advised. Gone are the days when people turn up on a whim and decide they are going to buy a building – it doesn’t happen.”
Back at the Park Lane Hotel, Allsop’s first commercial auction of the year ends as a success, with 85 per cent of properties sold having made or exceeded their reserve.
The final figure for funds raised is £34.9m, with buyers from as far away as Hong Kong participating via telephone and the auction house noting increasingly strong overseas interest.
“Demand has improved since the December sale, particularly for prime assets that could generate a reliable income stream,” says George Walker, an Allsop partner and auctioneer.
“It was the strongest market that we have seen for some time.”
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Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199
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Brief scoreline:
Manchester United 0
Manchester City 2
Bernardo Silva 54', Sane 66'
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
Chelsea 2 Burnley 3
Chelsea Morata (69'), Luiz (88')
Burnley Vokes (24', 43'), Ward (39')
Red cards Cahill, Fabregas (Chelsea)
Zayed Sustainability Prize
SHAITTAN
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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
In numbers
- Number of children under five will fall from 681 million in 2017 to 401m in 2100
- Over-80s will rise from 141m in 2017 to 866m in 2100
- Nigeria will become the world’s second most populous country with 791m by 2100, behind India
- China will fall dramatically from a peak of 2.4 billion in 2024 to 732 million by 2100
- an average of 2.1 children per woman is required to sustain population growth
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
UAE currency: the story behind the money in your pockets
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
2018 ICC World Twenty20 Asian Western Regional Qualifier
The top three teams progress to the Asia Qualifier
Final: UAE beat Qatar by nine wickets
Third-place play-off: Kuwait beat Saudi Arabia by five runs
Table
1 UAE 5 5 0 10
2 Qatar 5 4 1 8
3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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%3Cp%3EAverage%20amount%20of%20biofuel%20produced%20at%20DIC%20factory%20every%20month%3A%20%3Cstrong%3EApproximately%20106%2C000%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EAmount%20of%20biofuel%20produced%20from%201%20litre%20of%20used%20cooking%20oil%3A%20%3Cstrong%3E920ml%20(92%25)%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ETime%20required%20for%20one%20full%20cycle%20of%20production%20from%20used%20cooking%20oil%20to%20biofuel%3A%20%3Cstrong%3EOne%20day%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EEnergy%20requirements%20for%20one%20cycle%20of%20production%20from%201%2C000%20litres%20of%20used%20cooking%20oil%3A%3Cbr%3E%3Cstrong%3E%E2%96%AA%20Electricity%20-%201.1904%20units%3Cbr%3E%E2%96%AA%20Water-%2031%20litres%3Cbr%3E%E2%96%AA%20Diesel%20%E2%80%93%2026.275%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
MATCH INFO
Uefa Champions League, last 16, first leg
Ajax v Real Madrid, midnight (Thursday), BeIN Sports
