Despite being the first choice for wealthy Arabs in the world real estate market, London's attraction is melting away in the eyes of Arab investors after the Brexit vote, which has made Istanbul an alternative attraction center for Arabs. Real estate investors are rapidly selling properties in London. From July 23 onward, seven real estate funds have stopped transactions, which Turkish building contractors consider an opportunity. This is because many Arab home buyers consider Istanbul is the best alternative to London.
According to the Akşam daily, the U.K. has received a major blow following its decision to leave the EU and lost its fifth position to France in the world ranking due to the loss of value in the British pound.
Meanwhile, severe concussion in the economy has begun spreading sectors and companies in waves. The British real estate market, which has been a favorite investment area for Gulf states and Arabs, has been affected most by the shock.
The significance of London, which was a safe haven for the wealthy Arabs to purchase houses and make investments, has been on a rapid decline after Brexit. Arab investors are selling off their real estate properties in the city and are the top players of withdrawal from the British real estate sector.
Analysts warn about the possibility that office prices might drop by up to 20 percent in the U.K. within three years after secession from the EU, causing investors to rapidly withdraw their money from British real estate funds. The funds experienced a similar shock during the 2007 and 2008 crises and had to stop transactions, leading to a 40 percent fall in real estate prices in the U.K.
Turkish building contractors think that the decline in British real estate market is an opportunity for Turkey as the money that the Arabs have withdrawn from the market will seek a new safe haven. They argue that there is no alternative to Istanbul in the world real estate market in terms of investment intensity and yields.
İnanlar İnşaat CEO Serdar İnan said the funds exiting the U.K. will affect the Istanbul real estate market in a short time, adding, "So far, London has been an alternative to Istanbul for the Arabs. They used to bargain with us for real estate purchases, but they used to buy houses and offices in London without any bargaining. Now, Istanbul will be the most important destination for the funds exiting London."