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Mazaya Monthly Real Estate Report -
Week 1 - July 2016
The Brexit decision is expected to
affect investor trust in the UK market
and increase fluctuations in capital
markets whilst also putting pressure on
banking activity, in the UK. Real estate
sectors and the activity of foreign
companies are also expected to bear
the impact of the expected fluctuations
and potentially negative impacts.
Saudi Arabian investments in shares,
treasury bonds and real estate could be
at the core of the crisis and are among
those investments that will be highly
affected by the Brexit decision. Primarily,
this would deprive them of subsidies
currently provided by the EU, a matter
that would push the UK economy into
further recession – at a time when the
UK is a major commercial partner with
Saudi Arabia. Exports to the latter, at
the end of 2015, were around USD7.8
billion in value, while Saudi exports
to the UK exceeded USD2.6 billion.
Al Mazaya’s report further reveals that
Saudi Arabian investments in the British
economy are considerable and are divided
into several sectors and investment
opportunities, including: shares, bonds,
and property. Total investments, per year,
are estimated to be worth about USD18
billion. These investments are likely
to be affected as a result of the Brexit
decision, especially as all indicators
imply that the UK’s exit from the EU will
result in the British economy incurring
losses and a decline in its investment
attraction, amidst expectations for
its entry into a state of recession
in the short and intermediate term.