Iranian investors are preparing to flood money into property in the most expensive cities in the West now that international sanctions against the country have been lifted — and London could benefit to the tune of more than £1 billion ($1.42 billion).
According to research from London estate agent Rokstone, now the sanctions are gone, rich and ultra rich Iranians will spend as much as £6 billion ($8.49 billion) investing in property in the likes of London, Germany, and Switzerland, as well as on houses on the French Riviera.
Until January, Iran was subject to a series of sanctions which essentially prevented inward and outward investment coming and going from the country. The sanctions were lifted after the Iranian government complied with restrictions against its nuclear programme.
Rokstone says that while investment will be spread across these locations, London could receive as much as 20% of all the investment in Western property, thanks in part to the historical association with city that Iran’s super rich have. Rokstone’s managing director Becky Fatemi, who is Iranian, says that there is a history of wealthy Iranian’s coming to London, and that they’re now looking to resurrect that trend:
“London will be Iranian’s top location for investing in real estate. Culturally if you are wealthy in Iran you invest in property and jewellery/gold as long-term assets. Historically there are deep ties between the UK and Iran. Britain was the colonial power in Iran and it was British firms that first exploited Iran’s oil reserves. Between 1945 and 1979 the Shah of Iran, his Royal court, and the business elite had lots of ties with Britain and the elite owned luxury residential property in London and the home counties.”
“During the 1960s and 1970s Iranians and Greeks were the largest buyers of luxury property in Knightsbridge and Mayfair. The elite, and by that I mean the top 10% of Iranians in terms of wealth, would send their children to school in either the UK or USA and the fashion was to own an apartment in London or Paris, come shopping to Europe in the summer, and own a villa on the Riviera.”
Rokstone expects that around 25% more Iranians will look to buy properties in London in the coming two years, with some of those individuals and families worth more than £70 million ($99.1 million). It didn’t provide any details of how many Iranians are currently invested in property in the capital.
Iran’s re-entry into the global economy when sanctions were lifted was described by Morgan Stanley as the biggest thing for the global economy since the fall of the Berlin Wall and businesses across the West, ranging from car companies to private equity firms, are all clambering to enter the country, but Rokstone’s data suggests that Iranian people are equally keen to invest in the West.
The ability of Iranians investing in London will be made even easier by the re-introduction of direct flights from London to Iran’s capital, Tehran, in the coming months.
Rich families from many Middle Eastern states are already heavily invested in London, with the Qatari royal family particularly involved. The Qatari state owns a substantial stake in many iconic London properties, including western Europe’s tallest building, the Shard.
Every summer the capital also plays hosts to hundreds of so-called “Arab playboys” — rich young men from Arab states — who come to London to drive fast cars and spend lots of cash in department stores like Harrods, according to the Daily Mail.