Dubai investment bank Rasmala launches $2bn UK property strategy

Five-year plan aimed at GCC clients involves Sharia-compliant investment vehicle

Rasmala Investment Bank is focusing on multifamily properties in the London area with a focus on serviced and buy-to-rent sectors. PA

Dubai-based Rasmala Investment Bank has launched a $2 billion, five-year strategy to create a portfolio of residential properties in the UK to cater to growing interest from GCC investors.

The strategy targets the UK multifamily market through a Sharia-compliant investment vehicle, with an initial focus on the serviced apartment and build-to-rent subsectors in and around London, Rasmala said on Tuesday.

It has been seeded by the Rasmala Group and has an active investment pipeline over the next 12 to 18 months.

“Our UK multifamily strategy builds on Rasmala’s track record of matching GCC investors with real estate opportunities in the UK,” said Eric Swats, chief executive at Rasmala.

While the UK has traditionally been on the radar of property investors from the Middle East, the rise in the cost of borrowing in Britain has made purchases more favourable for cash buyers.

The number of buyers from the Middle East acquiring property in central London hit a four-year high in the second half of 2022, a report by Knight Frank this year found.

Investors from the region were involved in more than one in 10 of the property transactions in London's most prestigious districts, according to the report.

The combination of more relaxed rules around international travel and the weak pound means that interest in London property from the Middle East increased in 2022 compared with the previous year, it said.

“Compared to some parts of the world, buyers from the Middle East have been relatively free to travel to London and take advantage of the weak pound, which has resulted in discounts of more than 40 per cent compared to 2014 when price and currency movements are combined,” Tom Bill, head of UK residential research at Knight Frank, said at the time.

“The long-term appeal of London appears undiminished by the pandemic.”

Rasmala's strategy, which covers two residential blocks, also includes a controlling stake in Red Apartments Limited, which manages nearly 500 residential units in and around London.

“A new generation of renters are delaying moving on to the property ladder due to affordability concerns,” said Dominic Sherry, chief executive at Red Apartments.

Tenant demand in the UK reached a five-month high with strong demand across the country, the Royal Institution of Chartered Surveyors said this month.

A decreasing number of new landlords has led to a demand and supply imbalance that means rents could be pushed higher.

The proportion of surveyors who said they expected rents to rise in the next three months rose to 59 per cent, up from 45 per cent in the previous month’s survey, and nearing the highs reported at the start of last year, it said.

“We see considerable opportunity to grow our build-to-rent brand as a complement to our serviced apartment brand,” Mr Sherry said.

Established in 1999, alternative investment manager Rasmala invests directly and alongside Gulf-based institutional investors including banks, pension funds, endowments, family offices, corporations and government institutions.

The new UK multifamily strategy builds on Rasmala’s real estate investment experience in the UK, Europe and the US, it said.