As sanctions slowly lift in Iran, a wave of super-rich Iranians are preparing to flood London’s property market with billions of pounds over the coming years.
Three years of heavy International sanctions which essentially prevented any inward or outward investment from either entering or leaving the country, due to the blocking of SWIFT (an international inter-bank transfer system), were finally lifted at the beginning of 2016 as Iran complied with limits on its nuclear programme. Investors on both sides of the fence are eager to get back to where they left things in 2012.
A wave of ultra-rich Iranians will likely follow the same investment patterns of their Middle Eastern neighbors but also their own previous generation under the pre-sanctioned Shah period. We would expect to see large scale investments throughout London, Germany, the French Riviera and also Switzerland. However, we do not expect much of these investments to make their way to two other traditional favorite destinations for Iranians, New York and Los Angeles, as US government primary sanctions remain in place and investors (especially from the Middle East) keep a worrisome eye on the outcome of the upcoming US elections.
Research and consensus estimate that the rich and ultra rich Iranians will spend as much as £6 billion investing in property overseas over the coming 5 years; of this, up to £1 billion will likely make its way to London’s prime property market. Combine this with what is likely to be a flurry of international investments into Iran by multinationals and private equity, the trend of international investment is likely to accelerate.
This is another exciting turn of events as London could receive up to 20% of all international investments from Iran due to the close historic ties between the two countries between the early 1900s and up until the revolution of 1979. During the days of the Shah, many wealthy Iranians bought homes in prime central London and also along the Riviera to be close to the royals court.
And let’s not forget the reintroduction of regular flights between London and Tehran will bring with it business investments and tourism to both capitals.