The recent increase in oil prices could provide a boost to London’s prime office real estate market, according to Morgan Stanley. The Wall Street bank said that historically Middle Eastern sovereign wealth funds have bought up landmark buildings in central London not too long after a steady and sustained rise in crude prices. According to their analysis, higher oil prices tend to correlate with increased demand for top-tier commercial properties. “Prime real estate is frequently used as a ‘store of value’ for wealth derived from commodities … it follows then that a higher price for oil should drive improved demand for prime real estate, all else equal,” said Morgan Stanley analysts led by Bart Gysens in a note to clients on Sept. 18. The Bank of London and The Middle East , a financial services company, also expects investors based in the six-country bloc known as Gulf Cooperation Council to invest $3.1 billion in the U.K.’s real estate sector in 2024, including buildings that could be perceived as “trophy assets.” The investments would come after a steady 30% climb in WTI and Brent crude oil prices in the last three months, rising from around $70 to more than $90 per barrel of oil. The International Monetary Fund has estimated that the GCC-member Saudi Arabia’s government budget breaks even at about $80 a barrel. When oil prices rise above this threshold, the excess profits are invested by its sovereign wealth fund, PIF, in assets around the world, including tech stocks. Morgan Stanley says that in the past, a similar rise in oil prices has preceded strong 12-month share price performance for London office REITs (real estate investment trusts). The Wall Street bank however cautioned the relationship between oil prices and commercial property may not hold true across all types of real estate. The investment bank believes it creates upside potential only for London’s priciest office buildings. “A higher oil price provides — even if only incremental — an improved risk reward by potentially limiting some downside risk, all else equal,” the Morgan Stanley analysts added. The Wall Street bank’s analysts have “overweight” ratings on both commercial real-estate owners Derwent London and Great Portland Estates . The analysts expect that with balance sheets in solid shape but shares trading at or near all-time lows, the risk-reward is “compelling” despite broader skepticism about U.K. exposure and the office sector. For Derwent London, Morgan Stanley forecasts the stock reaching £27.00 ($33.43), up 45% from current levels, within 12 months. Similarly, shares of Great Portland Estates are expected to rise by 33% over the next 12 months to £5.45.