LONDON: Tough foreign competition in the London commercial property market is forcing local investors to invest in regional cities to tap rising rents there, with many making purchases privately to avoid auctions or even building office blocks from scratch.
Commercial and residential property in London has become a popular safe haven for investors from places such as Russia, China and southern Europe as a result of the financial crisis, and office prices have bounced back strongly from the lows.
From a $4 billion battle for control of the Canary Wharf financial district to the creation of the capital’s tallest building, The Shard, thanks to oil money from the Gulf, many of London’s landmarks have had a helpful overseas financing hand.
Last year, more than 55 billion pounds ($83.5 billion) was invested in commercial property across the country, much of it by pension funds, insurers and sovereign wealth funds looking for steady, long-term income.
But local investors are increasingly seeing advantage elsewhere.
“We do need to be savvy as to where we invest, and there are some markets in the UK, particularly prime core London, which we see as fully priced,” said Chris Perkins, who heads up the team managing business and industrial property at M&G Real Estate, a unit of insurer Pru-dential.
Political un-certainty about who will win in a British May 7 election could crimp demand for commercial property slightly in the early part of the year, but any slowdown in overseas interest would be temporary, analysts said.
With London the principal target for foreign capital, British investors are seeking rising rents in cities such as Glasgow, Leeds and Manchester as an economic recovery takes hold across the country.
In regional centers, a patchy property development pipeline and a shortage of premium property are creating opportunities for home-grown investors.
British institutions increased exposure to the regional office market to 46 percent by September 2014, from 33 percent a year ago, research from realtor Savills showed, while adding in funds from property firms, occupiers and private investors, their share of regional commercial property was 60 percent.
Among the most active of the British investors, M&G signed the largest regional deal of 2014, spending around 320 million pounds ($499 million) for 500,000 square feet of office space in Manchester. Of the 3 billion pounds it spent buying property in 2014, 60 percent was spent outside London.
The group made total returns of around 20 percent in 2014 and should achieve double-digit returns this year, M&G’s Perkins said. That stacks up well against more traditional investments, such as the blue-chip FTSE 100, down 2.7 percent in 2014.
For those wanting to invest in regional cities for capital growth and lucrative rentals, there are several routes. The most common is to invest in a real estate investment trust or a mutual fund, although those with a medium-term view and the right skills could buy an existing building or fund a new-build.
Although the value of offices outside London is lower, there has been a jump in rental demand for offices in the country’s major regional markets: from Bristol and Birmingham to Glasgow and Edinburgh.
While prime office locations in London’s crowded City financial district fetched rents of about 80 pounds per square foot by mid-2014, Birmingham offices got roughly 30 pounds and Manchester 32 pounds, Savills data showed.
Yields are also higher in the regions: while prime office space in the City returned 4.25 percent in the second quarter of 2014, Birmingham returned 5.25 percent and Manchester 5 percent.
For domestic investors looking to steal a march on rivals, many are going directly to local governments and companies that may need to sell off assets, as well as retailers and others open to leasing back their property to free up cash.
“We spend a lot of time seeking off-market transactions where we don’t have to be in competitive bidding,” said Bill Hughes, head of property at Legal & General Investment Management. “That is where you get the best value.”
After improving a building — with a view to holding it for an average of seven to 10 years — the investment arm of insurer Legal & General can sell it on as a performing asset to another long-term holder, such as a pension scheme or sovereign wealth fund.
The latter have been hesitant to invest directly in such assets, preferring more assured returns from higher-quality ‘Grade-A’ London properties which are easier to sell on.
The limited availability of Grade-A property assets outside London — down nearly 40 percent over the last four years, analyst Andy Brunner of Morningstar said — means those who take the risk of building the properties from scratch could cash in.
While the lack of income from an unbuilt property can put some off, an improvement in the underlying economy has left others more confident about taking on the risk, said Michael Haddock, senior research director at CBRE.
Although foreign investors are likely to follow the path forged by local rivals, the incumbents should enjoy their advantage for some time yet, said Haddock.
“In theory almost any investor might be interested in smaller markets. However, because it is harder to place large amounts in smaller cities quickly, some of the larger international investors who have large amounts to invest and limited management capacity might find them impractical.”
Foreign investors in red-hot London property market force locals out
Foreign investors in red-hot London property market force locals out
How AI is powering Saudi Arabia’s video games industry
- Technology is boosting efficiency and supporting local content development
RIYADH: Artificial intelligence is becoming a central force in Saudi Arabia’s rapidly expanding gaming and esports sector, shaping everything from game development and publishing to player analytics and competitive tournaments.
As the Kingdom accelerates its ambitions under Vision 2030, AI is increasingly being deployed not only as a technical tool but also as a strategic driver for industry growth and global competitiveness.
Saudi Arabia is integrating AI across studios, publishing platforms and esports operations to improve efficiency, expand local content creation, attract international investment and streamline tournament management. The broader goal is to position the Kingdom not only as one of the world’s largest gaming markets but also as a global hub for game development and esports infrastructure.
According to Saudi Arabia’s National Gaming and Esports Strategy, the Kingdom is home to more than 23.5 million gamers — around 67 percent of the population. Market revenues are projected to reach $1.36 billion by 2026. By 2030, the sector aims to contribute more than SR50 billion to the national GDP and create about 39,000 jobs.
Women represent 42 percent of gamers and 18 percent of esports players, among the highest participation rates in the region.
The Public Investment Fund, through its gaming arm Savvy Games Group, has invested billions of dollars in game studios, publishers and esports platforms worldwide. The investments are designed to strengthen local content creation while attracting global developers and investors to Saudi Arabia.
INNUMBERS
23.5 million Number of gamers in Saudi Arabia, representing about 67% of the population
$1.36 billion Revenue the Kingdom’s gaming market is expected to reach by 2026
SR50 billion Amount the gaming and esports sector aims to add to GDP to create 39,000 jobs by 2030
A spokesperson for Savvy Games Group told Arab News that AI is already integrated across its portfolio, particularly within ESL FACEIT Group.
“AI is used across our businesses. At ESL FACEIT Group, AI is already embedded in operations, particularly around data analytics and fair play,” the spokesperson told Arab News. “For example, EFG uses Minerva, an AI-powered moderation system that identifies and reduces toxic or abusive behavior by analyzing player communications and behavior patterns at scale. This enables faster and more consistent decisions and helps create healthier competitive environments for players.”
However, the spokesperson said AI itself does not automatically create a competitive advantage.
“AI tools are increasingly accessible to studios everywhere, which means they are not a competitive advantage on their own,” the spokesperson told Arab News. “The advantage comes from how clearly studios define their use cases and how effectively they apply AI to support their goals.”
For Saudi studios seeking international audiences, understanding how AI systems generate results is also critical to maintaining cultural accuracy and relevance in game content.
Within development studios, AI is helping accelerate production while lowering costs. AI-powered tools assist with concept art, 3D modeling, animation and world design, while automated testing systems can simulate thousands of gameplay scenarios to identify bugs and balance issues before release.
Steer Studios, for example, is applying AI in asset production and testing workflows. Automating repetitive tasks allows creative teams to devote more time to storytelling, gameplay design and world-building — key elements that distinguish successful games.
AI is also playing an important role in localizing content for Arabic-speaking audiences. Studios including Fahy Studios, Starvania Studio and Lobah Game Studio use AI for dialogue generation, translation and other localization tasks, helping Saudi-developed games reach global markets more quickly without losing cultural context.
For live-service and mobile games, maintaining player engagement is crucial to long-term revenue. AI systems track player behavior in real time, adjust difficulty levels, refine matchmaking systems and personalize in-game experiences.
Publishing platforms such as Nine66 and Sandsoft also rely on AI-driven analytics to support developers. These tools help predict player lifetime value, optimize marketing campaigns and manage online gaming communities.
“Our approach aligns closely with KSA’s focus on digital transformation, innovation and long-term capability building under Vision 2030,” the Savvy Games Group spokesperson told Arab News. “We see AI as an enabler of productivity, operational efficiency and ecosystem sustainability.”
The spokesperson added that partnerships, including collaboration with Humain, allow Saudi companies to explore scalable and responsible applications of AI across studios.
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“We take a pragmatic approach,” the spokesperson told Arab News. “We focus on technologies that provide real benefits. Any AI solution we use must improve efficiency and make day-to-day work easier.”
Artificial intelligence is also transforming the esports ecosystem.
Esports Infra — a platform created by Singapore-based Samarium in partnership with Saudi AI firm Wakeb — is designed to streamline the management of players, teams and content creators.
“Esports suffers from fragmentation,” Jonas Moaz, Esports Infra founder, told Arab News. “Talented players often don’t have a clear path to professionalism. Organizations struggle to find players, and content creators lack tools to connect with audiences.”
The platform uses machine learning to classify player skill levels, computer vision to analyze gameplay and predictive analytics to forecast development potential.
“We expect to improve the efficiency of building esports organizations — particularly in talent discovery and time management — by up to 50 percent,” Moaz told Arab News.
In addition to player analytics, the platform assists with scheduling, contract management and sponsorship evaluation, giving teams and brands clearer insights into performance and commercial value.
Despite AI’s growing role, its use in esports competition itself remains tightly regulated. Organizations such as the International Esports Federation prohibit AI from influencing live matches.
“We fully respect those regulations,” Moaz told Arab News. “Our tools support analysis but do not play on behalf of players. AI operates outside match time or as a statistical layer.”
Protecting player data and ensuring fairness remain key priorities for developers and platform providers.
“This is a top priority for us,” Moaz told Arab News. “Player data is encrypted and used only to improve the experience. To ensure fairness, we regularly audit our algorithms to prevent bias.”
Saudi Arabia’s gaming sector is steadily evolving from a consumer-driven market into a center for game creation and esports infrastructure. AI is embedded throughout this transformation — from accelerating game development and localization to analyzing player behavior and professionalizing competitive gaming.
If the targets outlined in Vision 2030 are achieved, AI will play a defining role not only in improving industry operations but also in helping Saudi Arabia compete globally in a sector increasingly driven by data, efficiency and advanced technology.
