Middle Eastern investments in London’s most in-demand office spaces are set to reach up to $2.5bn (£2bn) this year, according to a report by real estate broker Knight Frank. It identified 80 global investors that have set aside $6.2bn to invest in London offices.
A real estate environment of lower prices, high rental growth and lower borrowing costs has drawn in the interest of Gulf investors. The most in-demand offices are modern, centrally located and environmentally efficient workspaces in the UK capital.
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Borrowing costs for top London assets have decreased by 5.5% from a 2022 peak of 7%. The last few years have seen 77% of office renters not renew their leases, as opposed to around 50% over the past 25 years. The broker suggests this evidences a push towards greater demand for high-quality spaces.
“More businesses than ever are looking to upgrade their corporate headquarters,” the head of London offices at Knight Frank, Philip Hobley, said. “The growing momentum behind office-first work policies is underpinning both investor and developer confidence.”
The UK Government has welcomed Middle Eastern investments as it tries to reinvigorate the country’s stricken economy. UK Trade Secretary Jonathan Reynolds visited Saudi Arabia in September 2024 in a bid to secure a trade deal with members of the Gulf Cooperation Council. Members of the bloc include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).
At the time, Reynolds said: “Economic growth is this government’s driving mission and boosting trade and investment with some of the world’s biggest economies is crucial to that. In December, UK Prime Minister Keir Starmer visited the Gulf and affirmed the UAE and Saudi Arabia were among the country’s ‘most vital modern-day partners’.”
Human rights activists and groups have long expressed worries about the UK’s ties with countries with poor human rights records. Reprieve, a UK-based human rights legal group, called on Starmer to address what they called an “execution crisis” in Saudi Arabia. The kingdom reportedly executed 300 people in 2024, the highest total number in a single year.
In December 2024, the Guardian reported that Saudi Arabia’s Prime Minister Mohammed bin Salman lobbied David Cameron (while he was foreign secretary under Rishi Sunak’s government) to intervene in the legal case of a kingdom dissident as he threatened there “could [be] implications” for £100.08bn (SR465n) of planned investments in the UK.
Ghanem Al-Masarir, a prominent critic of the Saudi Arabian Government living in the UK under asylum protection, has alleged the kingdom hacked his phone and that he was physically assaulted by government agents in 2018.
The case emphasised concerns about how close economic ties with the Gulf might lead to political influence.
