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

Following a cautious period of capital deployment from Gulf Cooperation Council (GCC) investors, the UK has now edged ahead of the US in the transatlantic capital race, owing to greater political stability, the research said.

However, while BLME believes that investor sentiment towards the UK is broadly positive, it said the UK must work hard to convince those in the GCC that it remains a prime location for real estate investment.

The report also revealed that warehousing and logistics assets have emerged as the top GCC investor asset class for the first time, with 80% of respondents saying this sector is a key focus for their clients.

For Islamic finance providers such as BLME, logistics assets do not pose Sharia compliance issues, making this an uncomplicated asset class for GCC investors to target.

Khaled Alanani, head of real estate finance and investments at BLME, said: “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.”

Meanwhile, recent Property Week analysis shows that Qatar Investment Authority is one of the biggest landowners in central London, and the biggest overall overseas owner.