More than 10 Middle Eastern sovereign wealth funds are running the rule over UK housebuilders, sources have confirmed, writes Tom Bill.
They are understood to be bargain-hunting in a sector they believe has long-term value.
The funds are thought to include the Qatar Investment Authority, Dubai-based Emaar and Dubai International Capital.
One industry source said the fact they were eyeing up UK housebuilders marked a change of strategy: 鈥淗istorically, their investments have been central London trophy-assets such as Chelsea Barracks, but moving into more run-of-the-mill areas like housebuilding would not be much of a stretch.
鈥淭hey know there is a long-term requirement for housing in the UK and that supply won鈥檛 exceed demand any time soon.鈥
Several funds are understood to have contacted management teams and shareholders at volume housebuilders in recent months. One company thought to have received interest is Barratt, which declined to comment.
The funds are thought to be waiting for the bottom of the market before making formal moves. One senior financial source said: 鈥淭hey鈥檙e keeping a close watch on the sector. It depends on how it performs, but I鈥檇 have thought a fund would make a move in the next six-to-nine months.鈥
Middle Eastern investors have increased their exposure to the UK in recent months, as property prices have fallen and oil prices risen. One source pointed to the activity of the Saudi Arabian Saad Group, which owns a 29.4% stake in Berkeley Homes, as proof of this. 鈥淪aad had a stake in Berkeley, which it built up over time. Now it has started doing joint ventures with the company.鈥
Property group Minerva is also in the sight of Dubai-based fund Limitless.
The Money Men
Qatar Investment Authority
Total fund is 拢31bn. UK investments include Chelsea Barracks, the Shard at London Bridge and a 15% stake in the London Stock Exchange
Emaar Turnover in 2007 was 拢2.4bn. In June 2006 it bought US housebuilder John Laing Homes for 鈧1bn (拢510m) cash.
Dubai International Capital
Total fund: 拢6.6bn. It owns 100% of the Travelodge hotel group and a third of the London Eye
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