Gulf Developers Buy Into London’s Housing Crisis
While London housing approvals crashed 57% in Q1 2025 and domestic developers pull back, Arada just dropped AED 2.5 billion ($681 million) for a 75% stake on residential developer Regal.
The timing reveals their strategy: buy when others retreat.
The Numbers Behind the Deal
Middle Eastern buyers drove one in five sales over £20 million in London’s super prime market during 2024. Regal brings immediate scale with 4,000 completed units since 1998 and 10,000 units in development across 11 active projects.
Arada’s plan: triple that pipeline to 30,000 units within three years.
Why Buy Instead of Build
Arada bought 27 years of regulatory expertise instead of learning London’s planning system from scratch. The rebranding to Arada London signals permanent commitment, following Aldar Properties’ $1 billion acquisition of London Square in 2023 and Damac Properties’ Versace-designed tower in Nine Elms.
Gulf capital fills funding gaps that domestic developers can’t bridge. Government policy supports supply increases, but execution requires both capital and planning expertise.
Construction Impact
Regal’s current projects like Fulton & Fifth in Wembley (40% affordable housing) align with government priorities, potentially accelerating future approvals.
For construction professionals, this creates immediate opportunities:
Contractors: Larger project scales mean multi-year contracts worth tens of millions per development. Gulf developers typically prefer established relationships over lowest-bid procurement.
Suppliers: International developers often specify premium materials and systems. Early engagement during design phases secures longer-term supply agreements.
Specialists: MEP, facade, and fit-out contractors benefit from Gulf developers’ preference for design-build partnerships rather than traditional procurement.
What’s Next
More acquisitions will follow as regulatory barriers favor buying established platforms over greenfield development. The question for domestic construction companies: position for partnership with Gulf capital or risk being bypassed.
Timeline matters. Regal’s existing pipeline includes 10,000 units across 11 projects, with Arada planning to triple this scale.
The window for positioning is now.
