Wealthy Iranians, companies and state-backed buyers will spend up to £6 billion ($8.5 billion) on overseas real estate over the next five-to-10 years following the lifting of international sanctions, a report said on Wednesday.
High-net-worth Iranians are likely to look to buy properties in London, Dubai, Switzerland, Germany or the south of France, London estate agency, Rokstone, said.
Becky Fatemi, the agency’s Iran-born managing director, said London would be the location of choice, due to historical ties between the two nations. She added that wealthy Iranians tended to invest in property, jewelry and gold.
“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,” Fatemi said in a media release on Wednesday.
“Dubai on the doorstep will also be popular but it cannot compete with London’s educational system or cool summer climate. The other historic ties are with Germany, Paris, the French Riviera and Switzerland, but London is safer than these since a lot of properties in the capital are in conservation areas where building alterations are restricted, so values hold and outperform continental Europe,” she later added.
International sanctions on Iran were lifted in January after a watchdog confirmed the country had complied with a deal to prevent it developing nuclear weapons. The deal allows Iran’s oil to be sold internationally and access billions of assets frozen overseas. It was trumpeted as one of the biggest developments to the global economy since the collapse of the Soviet Union.
However, U.S. sanctions relating to Iran’s human rights policies and alleged support for terrorism remain. This will deter Iranians from investing in properties in New York or Los Angeles, which were traditionally popular locations, according to Fatemi.
Iran is the second-largest economy in the Middle East and North Africa region after Saudi Arabia. The number of dollar-millionaires living in Iran has jumped by 170 percent since 2000 and is seen reaching 55,000 by 2025, New World Wealth told CNBC. The country is home to 1,300 multimillionaires with net assets of $10 million or more and four billionaires, the wealth information provider added.
Fatemi said Iranians would predominately look for newly built or refurbished London apartments as second homes for themselves or their student offspring. Most buyers would look to spend anything between £1 million and £30 million, with Knightsbridge, Mayfair, South Kensington, Hampstead and St John’s Wood the most popular locations.
“The grandparents and older generation still remember London’s best addresses, so new buyers will look at the same locations as they did in the 1960s and 1970s. Over time, as long as the political situation continues to improve, Iranian buyers in London will join the ranks of Qatari, Kuwaiti and Saudi buyers and become significant players in the luxury marketplace again,” she said.