Bank of London and The Middle East predicts Gulf investment into UK commercial real estate to reach £3.4bn

Gulf investment into UK commercial real estate is expected to reach £3.4 billion by the end of 2026, according to new research from Bank of London and The Middle East (BLME).

The research is detailed in a new report, Home and Away: How GCC real estate investors are allocating capital across the UK, Gulf and US, and features insights from experts across the Gulf Cooperation Council (GCC) investor landscape. They predict that GCC investment into UK commercial real estate will increase by 11-20% this year, following a more cautious period of capital deployment.

While the UK and US continue to be closely matched as international real estate investment destinations, the UK has emerged as the top international destination for GCC investors. It now ranks on par with the GCC for GCC investment.

BLME believes that while investor sentiment towards the UK is broadly positive, the UK must work hard to convince those in the GCC that it remains a prime location for real estate investment. BLME’s fourth annual report, suggests three key trends are driving GCC international real estate capital allocation:

1. The UK has edged ahead in the transatlantic capital race with the US owing to greater political stability.
2. Gulf investors are increasingly seizing opportunities within the GCC, intensifying competition for capital that might once have gone abroad.
3.  Demand is shifting decisively towards UK warehousing and logistics with investors prioritising long-term, resilient assets over the living sector.

Khaled Alanani, head of real estate finance & Investments at BLME commented: “Our latest research shows that GCC investment into UK commercial real estate is expected to rise significantly, reaching up to £3.4 billion by the end of 2026. While the UK faces political and regulatory headwinds, including increased perceived scrutiny on wealth and shifting investment sentiment, it remains one of the most stable, transparent and liquid real estate markets globally. As geopolitical uncertainty continues to shape capital flow, we expect the UK to continue to offer long term value and resilience for GCC investors.”

“BLME remains committed to supporting our clients across the GCC and the UK with tailored, ethical finance solutions that enable strategic investment across all regions of the UK. In an era of uncertainty, the UK’s role as a safe haven for wealth preservation and long-term asset storage is only set to strengthen.”

The report also reveals that warehousing and logistics assets have emerged as the top GCC investor asset class for the first time, with 80% of respondents saying these sectors are a key focus for their clients.  For Islamic finance providers such as BLME, logistics do not pose Sharia compliance issues, making this an uncomplicated asset class for GCC investors to target.