Luxury goods-real estate London link in focus
LONDON, September 14, 2015
There is a correlation between luxury goods and residential real estate sales in London due to purchasing by the same high-net-worth spenders from resource rich countries in the Middle East, Asia and Africa, according to a report.
A new analysis of the interplay between retail and property sales in London by boutique estate agent Rokstone, found that overseas visitors buying handbags, clothing and jewellery in Knightsbridge, Mayfair and Marylebone are also snapping up apartments and houses in the streets off the city’s retail thoroughfares.
Where there have been drops in retail spending by certain overseas countries, there has also been a decline in property purchases, it said.
Rokstone has analysed the latest retail sales figures in London generated by shoppers from particular overseas countries, provided by consumer consultancy Global Blue.
It compared these retail sales figures against residential property sales from investors from these same countries.
The results showed a significant correlation: overseas countries with big spenders in London’s luxury retail scene are also big spenders in London’s premium property sector.
Similarly, countries where London retail sales have dropped dramatically over the last 12 months, have also witnessed drops in purchases of residential property in the capital.
In rank order, the top luxury retail and property shoppers in London were purchasers from Saudi Arabia, Qatar and China, said the analysis.
Since the start of this year, luxury retail spending in central London by shoppers from Saudi Arabia was up 28 per cent year-on-year, with the average spend per transaction averaging £1,495 ($2,306).
Similarly, residential property sales in PCL to Saudi purchasers was up 18 per cent YOY, with the average spend per transaction ranging from £5 million to £20 million.
Likewise, retail spending in London by shoppers from Qatar was up 12 per cent YOY, with the average spend per transaction averaging £1,906.
The residential property sales to Qatari buyers was also up 15 per cent YOY, with the average spend per transaction ranging from £3 million to £15 million.
Meanwhile, the retail spending in the capital by Chinese shoppers was up nine per cent YOY, with the average spend per transaction averaging £1,450, while property sales in London to Chinese purchasers was up three per cent YOY, with the average spend per transaction ranging from £450,000 to £1.5 million.
The analysis highlighted that more than 80 per cent of all property purchases by buyers from Saudi Arabia and Qatar were in the districts of Knightsbridge, Mayfair and Marylebone, and this is also the key locations where they do the bulk of their luxury retail shopping.
Together, Saudi and Qatari shoppers accounted for 16 per cent of all overseas retail sales in London’s West End.
The retail spending by Kuwaiti nationals was, however, down nine per cent YOY, with an average spend of just £781 per shop, and likewise property spending was down 15 per cent, with an average spend of £3 million to £10 million.
The retail spending by UAE nationals, meanwhile, was down six per cent, with an average spend of £1,551, and likewise property buying was down 12 per cent, with an average spend of £5 million to £10 million.
Like the other Gulf States, Mayfair, Knightsbridge and Marylebone are the preferred buying locations for property investors from these countries.
Becky Fatemi, managing director of Rokstone, said: “There is a significant correlation between luxury retail and property sales in London from overseas shoppers. The same people buying handbags and jewellery are purchasing apartments and houses in the capital.
“Ultra-high-net-worth families from Saudi Arabia and Qatar have been big spenders in London’s luxury retail and property sectors this year. Spending by Qatari shoppers has risen 10 per cent YOY on Oxford Street and 41 per cent on Regent Street.
"Likewise since January 2015 six of the big luxury house sales for properties priced above £40 million in Central London have been to buyers from Qatar. Saudi buyers have also been big buyers of luxury property in Knightsbridge and the West End this year and similarly their spending has risen seven per cent on Oxford Street and 51 per cent on Regent Street.”
“The drop in property spending by buyers from the United Arab Emirates and Kuwaitis reflects an upturn in property investing in their domestic markets. In the UAE in particular the Dubai property market has stabilised and returned to growth, so Emirati buyers are doing more domestic investments rather than buying in London," Fatemi added. - TradeArabia News Service
