Knight Frank - the wealth report 2019_watermark
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GLOBAL CITIES
London calling
The Wealth Report reveals the results of the latest Knight Frank City Wealth Index, and turns the spotlight
on five cities set to grow in prominence in the coming years
Words: Flora Harley, Senior Analyst, Knight Frank Research
The decision where to invest is a complex one driven by a range of factors, not least familiarity with the market in question and a good understanding of its dynamics.
This year, we have refined and built on the Knight Frank City Wealth Index, crunching numbers for many of the world’s leading cities in order to generate more of the detailed insights that investors rely on and identify the global urban powerhouses that matter most to the world’s movers and shakers. We also have an eye to the future, with an assessment of five global cities that we believe are set to grow in prominence and prosperity.
The results show that London has shrugged off concerns regarding Brexit to retake the top spot from New York, with the Big Apple slipping to second place overall. Investment was the only category in which New York managed to outperform the UK capital.
Asia’s growing prominence is confirmed, with Hong Kong and Singapore taking third and fourth positions respectively. Overall, the number of slots in our top 20 occupied by cities in the Asia-Pacific region rises to
Europe remains stable with six, but the number of North American cities making an appearance drops to seven.
TheKnightFrankCityWealth Index is built around three categories: wealth, investment and lifestyle. Here, we provide a brief explanation of each, along
with some of this year’s key findings
WEALTH
Using data from analyst GlobalData WealthInsight, we havelookedatthecurrentpopulationofHNWI(thosewith net assets of more than US$1 million) and UHNWI (those
with net assets of over US$30 million) residents in each city, as well as analysing recent growth performance.
Key findings In terms of UHNWIs, London has the largest population with 4,944, an increase of 582 over the last five years, the most of any city. For HNWIs, Tokyo reigns supreme with 488,582, although New York has seen the highest growth with an additional 55,434 HNWIs. New York also has the highest concentration of billionaires, with 94. Growth in Asia is noticeable, with Asian cities holding six of the top ten spots in the wealth category. Taipei comes in ninth, following 17% growth in its UHNWI population over the past five years.
INVESTMENT
To understand where the wealthy are investing, we assessed the most comprehensive data on major property investments (those worth the equivalent of US$10 million or more) by private individuals or family offices across both commercial and residential markets. Our ranking takes into account the volume
Global wealth trends
Peak performer Despite the uncertainty surrounding the UK’s exit from the EU, London has regained its position as the leading global city
Turn to page 30 for prime residential price data
of investment and its diversity in terms of the number of different nationalities investing.
Key findings North American cities reign supreme for private investment, occupying six of the top ten spots in this category, with New York in top place. But London remains dominant for diversity of investors.
LIFESTYLE
Drawing on our annual Attitudes Survey, we have identified some key decision influencers. For example, education – quantified here by the number and quality of universities – is a significant driver for purchases of first and second homes globally. Security is another key factor, as are luxury indicators including the number of five-star hotels and the quantity and quality of leading restaurants.
Key findings This category is a tale of two cities: London and Tokyo. London leads, due to the high number of five-star hotels – 76 – and the number and quality of its universities. Tokyo ranks highest for luxury dining and is the safest city according to The Economist Safe Cities Index.
THE KNIGHT FRANK CITY WEALTH INDEX 2019 |
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Connecting lines show the top ve cities |
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OVERALL RANK |
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WEALTH RANK |
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INVESTMENT RANK |
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LIFESTYLE RANK |
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1 |
LONDON |
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1= |
LONDON |
1 |
NEW YORK |
1= LONDON |
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2 |
NEW YORK |
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1= |
NEW YORK |
2 |
LONDON |
1= SINGAPORE |
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3 |
HONG KONG |
3= |
BEIJING |
3= |
HONG KONG |
3 |
NEW YORK |
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4 |
SINGAPORE |
3= |
HONG KONG |
3= |
LOS ANGELES |
4 |
HONG KONG |
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5 |
LOS ANGELES |
5 |
SINGAPORE |
5 |
WASHINGTON DC |
5 |
TOKYO |
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6 |
CHICAGO |
6 |
FRANKFURT |
6 |
SYDNEY |
6 |
PARIS |
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7 |
SHANGHAI |
7 |
SEOUL |
8 |
CHICAGO |
7 |
CHICAGO |
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8 |
SYDNEY |
8 |
SHANGHAI |
9 |
SINGAPORE |
8 |
SAN FRANCISCO |
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9 |
TOKYO |
10= |
MUNICH |
10 |
ATLANTA |
9 |
WASHINGTON DC |
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10 |
TORONTO |
10= |
PARIS |
12 |
BERLIN |
10 |
AMSTERDAM |
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11= |
BERLIN |
13 |
LOS ANGELES |
14 |
AMSTERDAM |
12 |
BERLIN |
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11= |
FRANKFURT |
18 |
TORONTO |
17 |
FRANKFURT |
13 |
LOS ANGELES |
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11= |
PARIS |
19 |
CHICAGO |
18 |
TORONTO |
15 |
SHANGHAI |
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14= |
BEIJING |
21 |
ATLANTA |
19 |
TOKYO |
16 |
SYDNEY |
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14= |
SAN FRANCISCO |
27 |
SYDNEY |
20 |
MUNICH |
18 |
SEOUL |
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14= |
SEOUL |
28 |
TOKYO |
23= SAN FRANCISCO |
19 |
TORONTO |
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17= |
MUNICH |
29 |
SAN FRANCISCO |
23= SHANGHAI |
20 |
BEIJING |
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17= |
WASHINGTON DC |
34 |
BERLIN |
35 |
SEOUL |
34 |
MUNICH |
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19 |
ATLANTA |
48 |
AMSTERDAM |
37 |
BEIJING |
35 |
FRANKFURT |
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20 |
AMSTERDAM |
50 |
WASHINGTON DC |
42 |
PARIS |
37 |
ATLANTA |
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Sources: Knight Frank Research, GlobalData WealthInsight, RCA, Five Star Alliance, Michelin, Times Higher Education, The Economist
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GLOBAL CITIES
FUTURE CITIES
When considering the cities of the future, we have focused on those factors that will support wealth creation including innovation indicators, wealth forecasts and economic growth, and those aspects that improve a city’s growth prospects, such as infrastructure.
Cities that demonstrate these characteristics are likely targets for future property investment. Below we look at five urban centres across the world that we believe will increasingly attract investors over the coming years.
01 Over the next five years, Oxford Economics data indicates that real GDP will grow by almost 60%. Often dubbed India’s
Bengaluru
Cities in India are often overshadowed by the success of
Mumbai, but Bengaluru is expected to disrupt this narrative.
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answer to Silicon Valley, Bengalaru is known for its technology |
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sector. The city is home to companies including Flipkart, Infosys |
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and Wipro, and over 400 multinationals including Microsoft, |
98** |
Hitachi and Samsung have bases there. This is supported by the |
fact that the city has been grossing the country’s highest office |
absorption volume consecutively for the last ten years. Bengaluru has made a commitment to creating a knowledge economy by investing in education centres, including the Indian Institute of Management Bengaluru, the Institute of Science and the National Aerospace Laboratories. The city’s broad ecosystem of innovation offers multiple opportunities for future growth, reflected in the rise of new age technology companies across sectors including artificial intelligence, food tech, fintech and robotics.
02
732**
Hangzhou
Hangzhou is making a name for itself both globally and within China. The transport, storage, information and communication services sector has more than doubled in the past five years, and is expected to grow by a further 46% over the next five, according to data from Oxford Economics. This growth in the city’s innovation and technology industry has resulted in an increase in its UHNWI population of 25% over the same period. Following in the footsteps of Alibaba, which was founded in Hangzhou, there are now 26 “unicorns” (tech companies with a valuation in excess of US$1 billion) in the city. Hangzhou also has the location
– in the middle of the Yangtze River delta, just an hour from Shanghai by high-speed train – and the infrastructure in the form of extensive rail, road and air routes to benefit from the economic success seen in the rest of China.
* UHNWI five-year forecast growth ** UHNWI population in 2018
03
559**
04
68**
05
426**
Global wealth trends
Stockholm
Stockholm is cementing its place as one of the world’s most innovative cities, making it a prominent centre for wealth creation and growth: GlobalData WealthInsight estimates that the UHNWI population will grow by 23% between 2018 and 2023. In 2017, the European Commission named Stockholm as the most innovative city in Europe, in part due to the value placed on welfare and sustainability, which nurtures pioneering ideas. As the birthplace of market-leading multinationals, including music streaming platform Spotify, it is clear that the entrepreneurial spirit is flourishing. This is further enhanced by the city’s ability to attract talent; Stockholm ranks second in the INSEAD Global Talent Competitiveness Index 2018, which measures a city’s ability to enable, retain, attract and grow its workforce. This is reflected by 8% population growth over the past five years and a further forecast increase of 7% over the next five.
Cambridge
As one of Europe’s leading technology clusters, Cambridge is the UK’s answer to Silicon Valley. In 2017, the turnover for digital tech business in “Silicon Fen” was £2.4 billion, or £152,000 per employee, according to Tech Nation. The world-class talent coming out of the University of Cambridge, combined with the city’s renowned research facilities and pre-existing network of tech businesses, encapsulates its appeal. Tech giants including Apple, Microsoft and Amazon have a presence and are developing pioneering technology including Amazon’s “Prime Air” and Apple’s AI capabilities. To accommodate the city’s growing success, Cambridge council is planning to build some 14,000 new homes by 2031. Infrastructure investment is also strong: a new train station was opened in 2017, with another on the way by 2021 and an underground railway, appropriately named the Isaac Newton Line, due to begin operation in 2025.
Boston
The city of Boston is an attractive and relatively affordable alternative investment destination to New York and San Francisco. Unlike these established markets, Boston is less densely populated by startups, making the competition for attracting capital less fierce. Yet the demand is still there; between 2015 and 2017 Boston received US$24.5 billion in venture capital investment, the fifth highest globally, according to the Center for American Entrepreneurship. The city is also able to draw on a vast pool of talent, with two Ivy League universities, Massachusetts Institute of Technology (MIT) and Harvard, which rank fourth and sixth respectively in The Times World University rankings for 2019. Tech giants including Google, Amazon, Facebook and Uber are already capitalising on this, with offices located in the city.
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SUPERYACHTS AND PRIVATE JETS
The wind and the waves
Using data from the specialists at WINGX and Superyacht Intelligence, The Wealth Report analyses global private jet and superyacht fleets and how they move around the world
WHO'S GOT THE YACHTS? Breakdown and global ownership distribution of superyacht eet
BOAT |
% OF GLOBAL FLEET |
REGION |
LENGTH |
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AFRICA
ASIA AND
AUSTRALASIA
45%
30–40m
EUROPE
40–60m |
38% |
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MIDDLE |
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EAST |
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13% |
NORTH |
60–90m |
AMERICA |
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90m+ |
4% |
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LATIN AMERICA |
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SUPERYACHT FLEET
CRUISE CONTROL
Global distribution of yacht voyages
50%
47%
40
WESTERN MEDITERRANEAN
39%
30
28%
EASTERN
MEDITERRANEAN
20 |
21% |
CARIBBEAN 18%
10 |
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ASIA, AUSTRALIA |
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8% |
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8% |
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US EAST COAST |
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7% |
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7% |
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NORTHERN EUROPE |
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6% |
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3% |
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4% |
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1% |
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LATIN AMERICA |
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3% |
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SUMMER |
WINTER |
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CRUISING |
CRUISING |
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CLUB MED Distribution of Mediterranean voyages during summer cruising season
FRANCE |
CROATIA |
MONACO |
MONTENEGRO |
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ITALY |
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ALBANIA |
SPAIN |
TURKEY |
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GREECE |
GIBRALTAR |
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MALTA |
19% |
16% |
12% |
11% |
9% |
8% |
6% |
4% |
4% |
3% |
3% |
Source: Superyacht Intelligence
Global wealth trends
PRIVATE JET FLEET
DEPARTURE BOARDS Number of private jet departures in 2018* by region and from selected cities, airports and locations featured in The Wealth Report 2019
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RANK: 29 |
7 |
17 |
21 |
33 |
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MEXICO CITY |
LAS VEGAS |
MONTREAL |
LONDON |
MOSCOW |
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(ADOLFO |
(MCCARRAN) |
(PIERRE E. |
(LUTON) |
(VNUKOVO |
91 |
163 |
202 |
146 |
154 |
LÓPEZ |
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TRUDEAU) |
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INTL) |
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BEIJING |
TOKYO |
MANILA |
MUMBAI |
DUBAI |
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MATEOS) |
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(BEIJING |
(TOKYO |
(NINOY |
(CHHATRAPATI |
(DUBAI |
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CAPITAL) |
INTL) |
AQUINO) |
SHIVAJI) |
INTL) |
9,893 |
24,353 |
14,888 |
12,784 |
8,865 |
2,685 |
1,202 |
781 |
1,516 |
1,400 |
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4,099 |
423 |
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MIAMI |
369 |
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1,577 |
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FLIGHTS BETWEEN |
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BAHAMAS |
ALL AIRPORTS SERVING |
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EACH CITY IN 2018 |
1,295 |
(JANUARY TO DECEMBER) |
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1,427 |
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1,192 |
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336 |
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1,874 |
66,968 |
22,483 |
13,915 |
5,407 |
1,067 |
8,432 |
15,842 |
4,258 |
4,065 |
RANK: 1 |
8 |
18 |
54 |
176 |
36 |
14 |
67 |
71 |
NEW YORK |
PARIS |
GENEVA |
IBIZA |
LAGOS |
MILAN |
CANNES |
TEL AVIV |
ISTANBUL |
(TETERBORO) |
(LE BOURGET) |
(COINTRIN) |
(IBIZA) |
(MURTALA MUHAMMED) |
(LINATE) |
(NICE-CÔTE D'AZUR) |
(BEN GURION) |
(ATATÜRK) |
Numbers of flights per departure region
2.0 million
1.96M
FRACTIONAL
PRIVATELY OWNED
CHARTER FLIGHTS
1.5
1.0
0.5 |
494,082 |
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0 |
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102,726 |
52,734 |
21,548 |
17,830 |
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NORTH AMERICA |
EUROPE |
LATIN AMERICA |
ASIA-PACIFIC |
MIDDLE EAST |
AFRICA |
THE JET SET Distribution of private jet registrations
REGION |
NUMBER OF ACTIVE BUSINESS JETS |
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LARGE JETS (10+ SEATS) AS % OF REGIONAL FLEET |
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NORTH AMERICA |
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13,685 |
29% |
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EUROPE, RUSSIA & CIS |
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2,879 |
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42% |
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LATIN AMERICA |
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39% |
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718 |
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ASIA-PACIFIC |
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487 |
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63% |
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MIDDLE EAST |
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198 |
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72% |
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AFRICA |
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135 |
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56% |
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*January to November (except where stated) |
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Source: WINGX |
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UHNWI TRAVEL
The social network
A ground-breaking new study of social media activity for The Wealth Report reveals how our readers divide
their time around the world
Words: Flora Harley, Senior Analyst, Knight Frank Research
We can track how wealth moves in many ways, but usually this will be at the level of capital transfers and investment flows, as well as more
permanent population growth and migration trends. However, transitory movements are just as interesting
when trying to understand your clients and work out where their interests and passions lie. The private jet and superyacht data on page 22 provides some clues, but thanks to social media it’s now possible to pinpoint where real people are spending their time.
By crunching the geotags of just under 1.5 million anonymisedTwitterpostsfrom7,500UHNWIsbasedin15 countries, we have been able to piece together a picture of when and where people travel. The results of this unique analysis are represented in the visualisations opposite. Some of the headline findings are listed below.
•The US, UK, France, UAE and Germany were the top five destinations for travel abroad.
•Proximity is a factor, with many favouring neighbouring countries. For example, New Zealand is popular with Australians.
•June is the most popular month for travel for more than half of the nationalities studied, followed by October and May.
•Both the US and France saw the most UHNWI visitors in June, while the UK was most likely
to be visited in April.
HOME AND AWAY
Proportion of individuals active on social media in their own country and abroad
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ACTIVE WHEN AWAY |
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ACTIVE AT HOME |
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AMERICAN |
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28% |
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99% |
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AUSTRALIAN |
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17% |
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97% |
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BRITISH |
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56% |
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93% |
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CANADIAN |
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21% |
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94% |
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CHINESE |
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36% |
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80% |
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EMIRATI |
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41% |
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78% |
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FRENCH |
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29% |
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89% |
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INDIAN |
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22% |
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89% |
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IRISH |
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47% |
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79% |
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NIGERIAN |
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22% |
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92% |
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PAKISTANI |
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32% |
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81% |
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QATARI |
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57% |
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67% |
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RUSSIAN |
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40% |
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81% |
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SAUDI ARABIAN |
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57% |
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64% |
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SOUTH AFRICAN |
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34% |
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84% |
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TIME TO FLY |
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15 APRIL: MOST POPULAR |
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WEEK FOR OVERSEAS VISITORS |
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The most popular |
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TO FLY TO THE UK |
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months for travelling |
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JUNE 3: TO FLY TO THE US |
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#1 (RANK) |
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JUNE 17: TO FLY TO FRANCE |
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#2 |
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#3 |
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#4 |
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MONTH |
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#5 |
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#6 |
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POPULAR |
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#8 |
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#7 |
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MOST |
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#9 |
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#10 |
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#11 |
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#12 |
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||
JANUARY |
FEBRUARY |
MARCH |
APRIL |
|
MAY |
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JUNE |
JULY |
AUGUST |
|
SEPTEMBER |
OCTOBER |
NOVEMBER |
DECEMBER |
|||||||||||||||||||||
Sources: Knight Frank Research, Mapper360® provided by Four Communications
Global wealth trends
HOT SPOTS
After the US, the top five destinations for each nationality
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|
|
NATIONALITY |
AMERICAN |
AUSTRALIAN |
BRITISH |
CANADIAN |
CHINESE |
EMIRATI |
FRENCH |
INDIAN |
IRISH |
NIGERIAN |
PAKISTANI |
QATARI |
RUSSIAN |
SAUDI ARABIAN |
SOUTH AFRICAN |
|||||||||||||||||||
DESTINATION |
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3 |
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BELGIUM |
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1 |
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||||
BENIN |
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2 |
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2 |
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3 |
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5 |
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CANADA |
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5 |
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3 |
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4 |
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ECUADOR |
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5 |
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EGYPT |
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4 |
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5 |
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1 |
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3 |
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4 |
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5 |
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FRANCE |
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3 |
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4 |
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2 |
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2 |
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||||
GERMANY |
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2 |
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GREECE |
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2 |
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HONG KONG |
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5 |
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2 |
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3 |
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3 |
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INDIA |
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4 |
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ITALY |
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JAPAN |
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3 |
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1 |
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KENYA |
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KUWAIT |
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MAURITIUS |
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5 |
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MALAYSIA |
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3 |
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2 |
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MEXICO |
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4 |
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5 |
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4 |
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3 |
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NETHERLANDS |
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2 |
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NEW ZEALAND |
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4 |
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OMAN |
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3 |
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PAKISTAN |
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5 |
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SAUDI ARABIA |
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4 |
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SINGAPORE |
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5 |
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SOUTH AFRICA |
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5 |
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4 |
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2 |
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5 |
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3 |
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4 |
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SPAIN |
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3 |
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THAILAND |
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2 |
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4 |
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4 |
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2 |
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5 |
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1 |
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3 |
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UAE |
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1 |
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1 |
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1 |
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1 |
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1 |
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1 |
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1 |
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1 |
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2 |
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1 |
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1 |
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2 |
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1 |
|||||
UK |
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2 |
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UKRAINE |
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Sources: Knight Frank Research, Mapper360® provided by Four Communications |
||||||||||||||
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24 | KNIGHTFRANK.COM |
25 | KNIGHTFRANK.COM |
vk.com/id446425943
MOVING MONEY AND RESIDENCY
Risk and reward
The Wealth Report assesses the factors driving capital movements around the world and takes a detailed look at wealth flows from three major hubs
Words: Flora Harley, Senior Analyst, Knight Frank Research
Wealth flows are influenced by many factors, including economic and personal stability, and preservation of wealth. Understanding these
ers can help provide insight into the direction investment flows, and how they impact on both residentialandcommercialpropertymarkets.
Increasingly, governments around the world are targeting globally mobile wealth, albeit for a variety of different reasons. Some are actively enticing wealthy individuals to relocate with favourable tax regimes, while others are introducing overseas buyer taxation on residential purchases.
Italy, for example, has introduced a new fixed
of €100,000 on global income for “non-domiciled” residents. Conversely, Singapore increased the foreign buyer stamp duty on residential property to 20% in July 2018. In England and Northern Ireland, a consultation on an overseas buyer’s taxation is scheduled to begin in 2019.
The backdrop to all this is the increasingly footloose natureofwealth.DatafromourAttitudesSurveyindicates that 36% of UHNWIs already hold a second passport, up from 34% last year, with 26% planning to emigrate permanently, up from 21%.
Enabling this is a growing number of citizenship and residency by investment schemes, with Moldova and Montenegro the latest to jump on the bandwagon in 2018. However, as we reported in The Wealth Report Autumn Update 2018, the OECD is scrutinising the potential misuse of these schemes. In October 2018, it released a “blacklist” of 21 jurisdictions, including Malta and Cyprus, that it believes are undermining international efforts to combat tax evasion. Some have since been removed from the list after putting in place a mechanism for the exchange of information.
A similar study is being conducted by the EU. Portugal is just one country under the microscope, with the authorities there coming under fire for issuing a golden visa – permanent residency, in return for a financial investment – to a Russian national wanted by Interpol.
Emerging woes
However, growing economic risk in emerging markets could boost demand for such schemes as money is channelled to safer havens. In October, the International Monetary Fund lowered growth forecasts for emerging markets from 4.9% in 2018 and 5.1% in 2019 to 4.7% in both years due to economic uncertainty and upheaval.
This concern is partly due to trade tensions between the US and China, as well as a result of investors seeking returns and turning to currency speculation. many citizens in these economies, including IndonesiaandChina,havepreviouslywitnessed strictercapitalcontrolsduetoeconomicdownturns, those who can may well be looking at options to keep their wealth globally mobile.
However, even if liquidity can be maintained, confidentiality is becoming harder to guarantee in certain parts of the world.
The EU, for example, is following the UK’s lead transparency measures with the approval of Anti-Money Laundering Directive in May 2018.
This will introduce fully public registers of the beneficial ownership of companies throughout the EU.
But such transparency is not finding universal favour: anumberofEUcountriesrecognisetheneedforregulators to be informed, but not for information to be made public.
FOCUS ON CHINA
In the past two years, China’s tightening grip on capital outflows has cast a shadow over outbound investment. The introduction of stricter controls has been partly driven by concern over falling foreign exchange reserves, which the government uses to maintain the value of the country’s own currency.
In the second half of 2016, China’s foreign currency reserveassetsfellbyUS$203billionasaresultofexchange rate fluctuations from a raft of overseas acquisitions. Across 2018 China’s foreign currency reserves fell by US$67 billion, although many of the declines seen in the earlier half of the year were beginning to reverse. If the exchange rate, which on 11 January 2019 stood at 6.76 renminbi to the US dollar, falls further, this decline could be exacerbated, possibly leading to further restrictions on overseas investment by Chinese nationals.
Real estate is now classified as a “sensitive” sector, which means almost all investments into overseas property markets require stringent official approval, especially for large transactions. Despite this, Chinese buyers are still looking at familiar global markets, such as London, Sydney, Melbourne and Hong Kong, which offer language advantages and immigration possibilities, as well as remaining outside any trade disputes.
The worsening trade relationship between China and the US may cause Chinese investors to shift their presence into other key markets. Indeed, there is already evidence for this: in the year to March 2018 there was a 4% decline in US transactions by buyers from mainland China, Hong Kong and Taiwan compared with the previous 12 months, according to the National Association of Realtors’ 2018 Profile of International Transactions in US Residential Real Estate.
Controls on capital outflows have had a limited impact on China’s domestic residential market. House prices across China grew by 24% between the beginning of 2016 and the third quarter of 2018 – but purchase restrictions applied across mainland Chinese cities are starting to exert downward pressure on prices.
FOCUS ON INDIA
India is witnessing a substantial rise in personal wealth. The country’s UHNWI population has grown by 30% in the past five years, according to data from GlobalData WealthInsight (see page 86), fuelling increased appetite for overseas real estate investments.
The results of our Attitudes Survey found that 24% of Indian UHNWIs have property investments, excluding first and second homes, outside India, up from 21% the
Global wealth trends
See page 72 for our latest luxury investment index
Slowing the flow As part of its attempts to bolster foreign currency reserves, China is imposing tighter restrictions on overseas property investment
26 | KNIGHTFRANK.COM |
27 | KNIGHTFRANK.COM |
vk.com/id446425943
MOVING MONEY AND RESIDENCY
previous year. Indian buyers are typically attracted by world class education opportunities for their children, new business ventures and stable investment returns. Coveted markets such as London, Melbourne and Dubai draw significant interest. However, other markets, particularly in Cyprus, Malaysia and Sri Lanka, are also proving popular with Indian investors.
Despite the restrictions in place under the Liberalised Remittance Scheme (LRS), there is a clear and growing interest from Indian nationals to invest abroad. The LRS permits each resident, as of May 2015, to remit up to US$250,000 overseas per financial year. Since the implementation of the higher limit, Indian residents have sent nearly US$30 billion overseas, with remittances up by 144% between the 2015/16 and 2017/18 financial years.
At present, there is no indication that there will be any change to the LRS limits. The last time the LRS limit was reduced was in 2013, partly driven by the Current Account Deficit (CAD) reaching 4.8% of GDP. Despite the recent depreciation of the Indian rupee, down 9.6% against the US dollar in the year to January 2019, the CAD remains within its “comfort zone”, most recently cited as 2.9%. However, it is worth noting that with a central government election due in the middle of 2019, there could be further economic changes that may impact outward flows.
FOCUS ON THE MIDDLE EAST
The spread of private wealth across the Middle East region is centred on the major Gulf States, with Saudi Arabia taking the top spot, followed by the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.
While oil income boosts government revenues, the two biggest sources of wealth for the private sector have been the construction and financial services sectors. Today, these are prominent in the investment portfolios of Middle Eastern private billionaires, accounting for 23% and 15% respectively.
Given the Gulf Cooperation Council’s social context, family businesses are the largest player in trading activities.KnightFrankMiddleEast’sWealthIntelligenceteam has identified 1,300 family businesses across the region. Inlinewithglobaltrends,generationaltransitionremains a challenge: just 7% of billionaire businesses survive to their fourth generation, and only 2% to their fifth.
As a result, Middle Eastern families are increasingly turning their attention to generational planning to preserve the passage of wealth. One consequence of this
HUNTING HIGH AND LOW
Middle Eastern wealth currently seeking new property investment opportunities (US$)
BAHRAIN |
SAUDI ARABIA |
KUWAIT |
OMAN |
QATAR |
|
UAE |
|||||||
0.4bn |
1.9bn |
|
0.1bn |
0.2bn |
0.8bn |
|
2.8bn |
||||||
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|
LONDON |
UK REGIONAL |
EUROPE |
US |
3.3bn |
1.0bn |
1.3bn |
0.6bn |
Data as of 10 December 2018 |
Source: Knight Frank Middle East Wealth Intelligence |
||
is that investment is increasingly outward looking. Volatile oil revenues, regulatory changes such as VAT, geopolitical uncertainty and government investigations remain a key driver of outbound flows.
Real estate remains a significant wealth preservation asset class. Middle Eastern investors have been longstanding players in global real estate markets, in particular in the UK, Europe and US. Recently, this appetite for global geographic diversification has intensified due to the continued strength of the US dollar. Data from our Attitudes Survey shows that 29% of Middle Eastern UHNWIs increased their exposure to property in 2018.
Knight Frank Middle East’s Wealth Intelligence team has mapped the requirements of private wealthy investors in the Middle East. At the end of 2018, there was an estimated US$6.2 billion looking to be invested into commercial property alone, with a significant amount targeting the UK. London remains the top target, followed by other European cities, such as Berlin. This is driven by stability, transparency, liquidity, good returns and cost of debt.
In terms of sectors, office and hospitality remain preferred segments. However, following global trends and opportunities, there is an increasing enthusiasm and consideration for more specialist sectors, such as healthcare, education and the private rented sector.
Property market update
Residential and commercial property trends
Turning point |
What, where, why |
The latest results of the Knight Frank |
A round-up of the property |
Prime International Residential Index |
investment market in 2018 |
– page 30 |
– page 36 |
Singapore king
Investor Raj Kumar on the secrets of his success
– page 38
For sale through Knight Frank - Huxley House, St. John’s Wood
28 | KNIGHTFRANK.COM
vk.com/id446425943
LUXURY RESIDENTIAL MARKETS
TURNING POINT
We share our unique annual round-up of the winners and losers in the world of luxury residential property
Words: Kate Everett-Allen,
Head of International Residential Research, Knight Frank
The value of the 100 luxury residential markets tracked by the Knight Frank Prime International Residential Index (PIRI 100) increased on average by 1.3% last year, down from 2.1% in 2017 – and the Index’s lowest rate of
annual growth since 2012.
This decline comes as little surprise. As we learn to live without the ultra-low interest rates that have supercharged real estate markets globally since 2008, lower price growth is an inevitable consequence of the shift in monetary policy.
For sale through Knight Frank - Villa Sazia, Saint Jean - Cap Ferrat
Property market update
A year ago, 11 cities registered double-digit annual growth; in 2018, only five fell into this bracket. Yet despite the slowdown, almost three-quarters of the locations in the PIRI 100 registered rising or static growth in 2018 compared with 65 in 2017.
European cities are still performingstrongly,whilecities
Greater China continue slide down the rankings. However, divergence is appearing in emerging markets. Despite their economic woes, severa l key Lat in American cities saw prime prices increase,
while similarly challenged luxury markets in Turkey seeing sharp reversals in value.
Key global wealth hubs such as New York, London and Geneva, as well as cities that might be expected to still be enjoying a postfinancial crisis bounce (or, indeed, a preBrexit boom) such as Dublin, are now finding themselves in negative territory.
Below, we share some key findings and trends from the PIRI 100, along with insights from our research teams around the world.
Thriller in Manila
Manila tops the PIRI 100, with luxury home prices rising by 11%. This is driven by a lack of supply and the Philippines’ thriving economy
– a n n u a l G D P growth exceeded 6% in 2018 – which motivated some expatriates to grab a slice of real estate
back home. However, Manila’s
performance needs to be put into perspective. In the 12 years we have been compiling PIRI, the
top-performing market has yet to record annual growth below 21%. So 11% is quite a departure, but it confirms our theory that prime markets are converging and the outliers are disappearing.
Optimistic outlook Demand remains strong in French hotspots such as Cap Ferrat
THE PIRI 100 |
Luxury residential market performance by global rank and geography |
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(annual % change December 2017 to December 2018) |
KEY: (AF) AFRICA - (AS) ASIA - (AU) AUSTRALASIA - (CA) CARIBBEAN - (EU) EUROPE - (LA) LATIN AMERICA - (ME) MIDDLE EAST - (NA) NORTH AMERICA - (RU) RUSSIA & CIS |
11.1% |
10.6% |
10.5% |
10.0% |
10.0% |
9.5% |
9.1% |
8.6% |
8.1% |
7.8% |
6.8% |
6.5% |
6.5% |
6.3% |
6.1% |
6.0% |
6.0% |
6.0% |
5.3% |
5.1% |
5.0% |
5.0% |
4.3% |
4.1% |
4.0% |
4.0% |
4.0% |
3.8% |
3.3% |
3.1% |
3.0% |
3.0% |
3.0% |
3.0% |
2.8% |
2.8% |
2.6% |
2.5% |
2.3% |
2.3% |
2.2% |
2.1% |
2.1% |
2.0% |
2.0% |
2.0% |
1.8% |
1.8% |
1.7% |
1.5% |
1.5% |
1.5% |
1.5% |
1.5% |
1.4% |
1.1% |
1.1% |
1.0% |
1.0% |
0.9% |
0.7% |
0.7% |
0.6% |
0.5% |
0.5% |
0.5% |
0.3% |
0.3% |
0.3% |
0.2% |
0.1% |
0.0% |
0.0% |
0.0% |
-0.7% |
-1.0% |
-1.5% |
-1.5% |
-1.5% |
-2.0% |
-2.3% |
-2.5% |
-2.5% |
-2.5% |
-2.8% |
-3.0% |
-3.4% |
-3.8% |
-3.9% |
-4.3% |
-4.4% |
-4.5% |
-5.0% |
-5.7% |
-7.2% |
-7.5% |
-10.0% |
-10.4% |
-11.5% |
-25.0% |
MANILA |
EDINBURGH |
BERLIN |
MUNICH |
BUENOS AIRES |
MEXICO CITY |
SINGAPORE |
BOSTON |
MADRID |
SAN FRANCISCO |
TOKYO |
JERSEY |
BARCELONA |
TORONTO |
SEATTLE |
LISBON |
ALGARVE |
CHAMONIX |
PARIS |
FRANKFURT |
ASPEN |
LOS ANGELES |
MOSCOW |
AUCKLAND |
AMSTERDAM |
CAP FERRAT |
BEIJING |
CAPE TOWN |
MIAMI |
SYDNEY |
VAL D'ISÈRE |
MARBELLA |
BRISBANE |
WASHINGTON DC |
CYPRUS |
VERBIER |
JAKARTA ST RÉMY DE PROVENCE |
CHICAGO |
GUANGZHOU |
MELBOURNE |
PERTH |
GOLD COAST |
MUSTIQUE |
GSTAAD |
MONACO |
CANNES |
HONG KONG |
SÃO PAULO |
OSLO |
COURCHEVEL 1850 |
IBIZA |
VENICE |
ÉVIAN |
DELHI |
MEGÈVE |
BENGALURU |
FLORENCE |
KUALA LUMPUR |
MÉRIBEL |
VIENNA |
ST PETERSBURG |
PHUKET |
LUCCA |
LAKE COMO |
ROME |
MUMBAI |
BAHAMAS |
ST BARTS |
MILAN |
SHANGHAI |
SARDINIA |
LAUSANNE |
BARBADOS |
BANGKOK |
ZURICH |
BRUSSELS |
ST TROPEZ |
TAIPEI |
GENEVA |
STOCKHOLM |
RIYADH |
UMBRIA |
NEW YORK |
DUBLIN |
MALLORCA DUBAI RIO DE JANEIRO |
OXFORD |
ABU DHABI |
LONDON |
NAIROBI |
BRITISH VIRGIN ISLANDS |
DOHA |
BODRUM |
ST MORITZ |
THE HAMPTONS |
ISTANBUL |
VANCOUVER |
LAGOS |
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AS |
EU |
EU |
EU LA LA AS NA EU NA AS EU EU |
NA |
NA |
EU EU EU EU EU NA NA RU AU EU |
EU AS AF NA AU |
EU EU AU NA EU EU AS EU |
NA AS AU AU AU CA EU EU EU AS |
LA |
EU |
EU EU EU EU AS EU AS |
EU |
AS |
EU EU |
RU AS |
EU EU |
EU AS CA CA EU AS |
EU |
EU |
CA AS |
EU EU |
EU AS EU EU ME EU |
NA |
EU |
EU |
ME |
LA EU |
ME EU |
AF CA ME ME |
EU |
NA |
ME |
NA |
AF |
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1 |
2 |
3 |
4= |
4= |
6 |
7 |
8 |
9 |
10 |
11 |
12= |
12= |
14 |
15 |
16= |
16= |
16= |
19 |
20 |
21= |
21= |
23 |
24 |
25= |
25= |
25= |
28 |
29 |
30 |
31= |
31= |
31= |
31= |
35= |
35= |
37 |
38 |
39= |
39= |
41 |
42= |
42= |
44= |
44= |
44= |
47= |
47= |
49 |
50= |
50= |
50= |
50= |
50= |
55 |
56= |
56= |
58= |
58= |
60 |
61= |
61= |
63 |
64= |
64= |
64= |
67= |
67= |
67= |
70 |
71 |
72= |
72= |
72= |
75 |
76 |
77= |
77= |
77= |
80 |
81 |
82= |
82= |
82= |
85 |
86 |
87 |
88 |
89 |
90 |
91 |
92 |
93 |
94 |
95 |
96 |
97 |
98 |
99 |
100 |
The Knight Frank Prime International Residential Index (PIRI 100) tracks the movement in the price of luxury homes |
Sources: All data comes from Knight Frank’s global network with the exception of: Tokyo (Ken Corporation); São Paulo and Rio de Janeiro (Fundação Instituto de Pesquisas Econômicas); Oslo (Torbjørn Ek); Chicago, Los Angeles, Miami, New York, |
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San Francisco, Seattle and Washington DC (S&P CoreLogic Case-Shiller); Barcelona (Ministerio de Fomento); Jersey (States of Jersey); Berlin and Frankfurt (ImmobilienScout 24); Toronto (Toronto Real Estate Board); |
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Mexico (Sociedad Hipotecaria Federal); Stockholm (Svensk Mäklarstatistik AB). |
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Notes: All price changes in local currencies. Data for Cyprus relates to the period June 2017 to June 2018. Data for Barcelona and Jersey relates to the period September 2017 to September 2018. Data for Chicago, Los Angeles, Miami, New York, |
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San Francisco, Seattle and Washington DC relates to the period October 2017 to October 2018. Data for Abu Dhabi, Berlin, Doha, Dubai, Frankfurt, Rio de Janeiro, Riyadh, São Paulo, Toronto and Vancouver relates to the period November 2017 to |
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November 2018. Data for Stockholm relates to the period 1 January 2018 to 5 December 2018. Price change for Tokyo relates to properties above ¥100m. |
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Data for Boston relates to downtown condominiums. Data for Buenos Aires relates to new-build properties only. |
30 | KNIGHTFRANK.COM |
31 | KNIGHTFRANK.COM |
vk.com/id446425943
LUXURY RESIDENTIAL MARKETS
PRIME MOVERS
Mapping luxury price movements worldwide
The Knight Frank Prime International Residential Index (PIRI 100) is now in its 12th year and tracks the movement in luxury prices across the world’s top residential markets. The index covers major financial centres, gateway cities and second home hotspots – both coastal and rural – as well as leading luxury ski resorts.
Miami
Stacey Watson, Knight Frank International
Home to around 33,300 millionaires, we expect Miami to record prime price growth of 5% in 2019, outperforming a number of other key US cities. Prices are rising from a comparatively low base, new investment in the form of the Brightline train is boosting the local economy and Florida’s low tax status may spur some US residents to move to the sunshine state in the wake of the new State and Local Tax (SALT) deductions.
Property market update
Singapore
Dr Lee Nai Jia, Knight Frank Singapore
Singapore’s path over recent years has been an erratic one, with prime prices stifled by stringent taxes and cooling measures. A reduction in Seller’s Stamp Duty in 2017 was interpreted by some as a change in policy sentiment, prompting a surge in demand, but a further tightening of stamp duties for nonresidents and developers in 2018 has halted the market. A slowdown in 2019 looks likely, although solid economic fundamentals should prevent prime price growth from entering negative territory.
Paris
Roddy Aris, Knight Frank International
Steady and sustainable defines Paris’s 5.3% price growth in 2018, which comes on the back of a 12% uplift in 2017. The city’s wide Haussmannian boulevards are enticing French expatriates and appealing to overseas buyers, including those from the US, the Middle East and China. At around €19,000 per sq m, prime prices in Paris are around half those found in London and New York and with largescale regeneration projects planned ahead of the 2024 Paris Olympics, investors as well as second home owners will be paying closer attention to the French capital.
Perth
Michelle Ciesielski, Knight Frank Australia
Early signs of business recovery and a strengthening office market had a positive impact on the prime residential market in Perth, with prices rising 2.1% in 2018. Properties along the waterfront have remained popular with the downsizing generation, and the city still offers good value relative to other major Australian cities. The spotlight in 2019 will remain on the pace of recovery as the Western Australian resources sector continues to build.
Mumbai
Arvind Nandan, Knight Frank India
Although non-residents are subject to restrictions when buying in India, the real estate market is opening up, and new regulations are boosting transparency. Pricegrowthwaslargelystaticin2018(0.3%) as developers offered discounts to dispose of unsold inventory. India is now the world’s fastest growing major economy according to the International Monetary Fund, with GDP growth of 7.5% forecast for 2019, and although prices may soften in the short term due to excess supply, in the long term we expect wage grow th and strong investment in infrastructure to bolster demand.
Sources: All data comes from Knight Frank’s global network with the exception of: Tokyo (Ken Corporation); São Paulo and Rio de Janeiro (Fundação Instituto de Pesquisas Econômicas); Oslo (Torbjørn Ek); Chicago, Los Angeles, Miami, New York, San Francisco, Seattle and Washington DC (S&P CoreLogic Case-Shiller); Barcelona (Ministerio de Fomento); Jersey (States of Jersey); Berlin and Frankfurt (ImmobilienScout 24); Toronto (Toronto Real Estate Board); Mexico (Sociedad Hipotecaria Federal); Stockholm (Svensk Mäklarstatistik AB).
Notes: All price changes in local currencies. Data for Cyprus relates to the period June 2017 to June 2018. Data for Barcelona and Jersey relates to the period September 2017 to September 2018. Data for Chicago, Los Angeles, Miami, New York, San Francisco, Seattle and Washington DC relates to the period October 2017 to October 2018. Data for Abu Dhabi, Berlin, Doha, Dubai, Frankfurt, Rio de Janeiro, Riyadh, São Paulo, Toronto and Vancouver relates to the period November 2017 to November 2018. Data for Stockholm relates to the period 1 January 2018 to 5 December 2018. Price change for Tokyo relates to properties above ¥100m.
Data for Boston relates to downtown condominiums. Data for Buenos Aires relates to new-build properties only.
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LUXURY RESIDENTIAL MARKETS |
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continues to evolve, its capacity for future |
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RELATIVE VALUES |
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growth is significant.” |
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Once anaemic at best, Europe’s second |
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How many square metres |
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home markets have steadied. Lisbon (+6%) |
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of prime property does |
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US$1m* buy in key cities? |
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and the Algarve (+6%) are both correcting |
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SIZE |
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after a decade-long downturn. In France, |
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CITY |
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(SQ M) |
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President Macron’s honeymoon period |
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MONACO |
16 |
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may be over, but optimism among prime |
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HONG KONG |
22 |
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buyers shows little sign of wavering. Our |
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NEW YORK |
31 |
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data shows enquiries for French homes |
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LONDON |
31 |
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rose by 59% in 2018 compared with 2017. |
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Of the 11 French markets tracked by PIRI, |
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SINGAPORE |
36 |
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only St Tropez saw prices slip lower, albeit |
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LOS ANGELES |
39 |
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by just -1.5%. |
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GENEVA |
41 |
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PARIS |
46 |
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AT A GLANCE |
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SHANGHAI |
57 |
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SYDNEY |
52 |
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BEIJING |
67 |
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Manila leads |
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TOKYO |
67 |
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the PIRI 100 |
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BERLIN |
73 |
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for 2018 with |
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MIAMI |
93 |
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11% annual growth |
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MELBOURNE |
97 |
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MUMBAI |
100 |
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ISTANBUL |
109 |
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DUBAI |
143 |
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Safe havens |
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Capital flight, particularly from politically |
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CAPE TOWN |
177 |
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volatile emerging markets, continues to fuel |
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SÃO PAULO |
200 |
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demand. In Madrid, Venezuelan buyers are |
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being joined by others from Latin America, |
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while Turkish buyers are active in Germany |
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and the Middle East. As our second home |
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ownership chart on page 35 shows, economic |
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HUMAN AT SCALE |
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Sources: Knight Frank Research, |
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and political volatility seem to be pushing |
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wealth to new markets. |
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* Exchange rates calculated at 31 December 2018 |
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Douglas Elliman, Ken Corporation |
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Interestingly, security concerns help to |
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explain the 10% rise seen in Buenos Aires. |
Continental shifts |
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a decade of subdued growth when the market |
Interest in more secure new-build apart- |
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Burgeoning rental demand, limited supply |
reacted to political uncertainty as well as |
ments has helped push luxury prices higher. |
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and, in most cases, buoyant local economies |
the introduction of higher purchase taxes.” |
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mean four European cities, led by Edinburgh |
In Berlin, Till Brühöfener-McCourt, Head of |
Taking back control |
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(+10.6%) and Berlin (+10.5%) make the top ten, |
ResearchatourGermanpartnerZiegert,says: |
Singapore saw prices rise by just over |
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despite slower growth across the euro zone. |
“The city is still relatively young compared |
9%, marking the high point of its current |
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However, as my colleague Oliver Knight |
with other European cities and 2019 marks |
market cycle, according to Dr Lee Nai Jia, |
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points out, “Edinburgh’s surge follows nearly |
its 30th birthday as a reunified city. As it |
our Head of Research there. The city has |
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Property market update
For sale through Knight Frank - One Blackfriars, London
been subject to more than 15 macroprudential regulations – or cooling measures
– since 2010. 2018 was no exception, with stamp duty for non-residents rising to 20%.
Auckland (+4.1%), Beijing (+3.9%), Guangzhou (+2.3%), Hong Kong (+1.8%), Shanghai (+0.1%) and Vancouver (-11.5%) also saw policymakers flex their muscles in an attempt to cool prices. Measures ranged from a ban on the purchase of existing homes by overseas buyers in New Zealand to a proposed vacancy tax on new developments in Hong Kong to higher mortgage rates and a points-based system for new buyers in some Chinese cities.
Hong Kong has been defying the odds for several years now with new price thresholds broken year-on-year but as David Ji, Knight Frank’s Head of Research for Greater China explains, 2018 marked a
turning point. “The stock market slid 13.6%, its worst decline since 2011, and interest rate hikes influenced buyer sentiment.”
Vancouver, arguably recipient of the most stringent regulations in 2018–in- cluding higher taxes for non-residents, a speculation and vacancy tax, an empty homes tax and an increased school tax for properties above C$3 million – is also still absorbing the impact of China’s tightening of capital controls, which up until late 2016 had been an influential source of demand.
NYLON futures
The impact of Brexit has been largely priced into the prime London market since the referendum in 2016, with prices in some neighbourhoods falling by as much as 20%. However, there is growing evidence of pentup demand as buyer registrations build,
Bouncing back Buyer registrations are building for prime London property
HOME FROM HOME |
74% |
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Proportion of UHNWIs owning |
65% |
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second homes outside their |
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country of residence |
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46% |
49% |
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35% 35% |
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15% 17%
MIDDLE EAST
LATIN AMERICA
EUROPE
RUSSIA & CIS
NORTH AMERICA
ASIA
AFRICA
AUSTRALASIA
Source: The Wealth Report Attitudes Survey 2019
suggesting that when – or if –a deal is agreed, theremaybeabounceasthosewhohavebeen wavering on the sidelines decide to commit.
The consultation period for a non-resident Stamp Duty Land Tax surcharge is now underway but international buyers, particularly those with US dollars (see currency chart on page 32), may be unfazed by the proposed 1% tax if the pound takes a tumble.
InNewYork,theStateandLocalTax(SALT) law, stock market volatility and a strong US dollar, which led some foreign buyers to sit on their hands during 2018, have compounded the underlying structural issue of oversupply. However, as Andrew Wachtfogel, Senior Vice President of Research and Analytics at our US partners Douglas Elliman points out, with Wall Street bonuses expected to be robust in 2019 and mortgage interest rates still near historic lows, there may be a silver lining.
34 | KNIGHTFRANK.COM |
35 | KNIGHTFRANK.COM |
vk.com/id446425943
COMMERCIAL REAL ESTATE
What, where, why
Knight Frank’s capital markets research team analyses key commercial property investment trends with a focus on where private capital is being spent
Data analysis by Lily Nguyen, Knight Frank Research
MARKET OVERVIEW
HOW MUCH IS BEING INVESTED?
Amount invested globally into commercial real estate*
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US$1.2 trillion |
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Q3 2018 |
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1.0 |
US$907 BILLION |
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0.8 |
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See our top |
0.6 |
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investment picks |
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on page 46 |
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0.2
0
2007 |
2010 |
2015 |
2018 |
WHERE IS INVESTMENT COMING FROM?
The largest source of cross-border real estate investment capital is North America with the majority of this capital focused on investing within the US, although Canada, the UK and mainland Europe remain key targets
Top investment destinations for regional real estate investors (in US$)*
TOP LOCATIONS FOR INVESTMENT FROM NORTH AMERICA |
FROM EUROPE |
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FROM ASIA-PACIFIC |
OTHER |
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US |
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GERMANY |
UK |
CHINA |
JAPAN |
US |
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362bn |
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49bn |
41bn |
25bn |
23bn |
13bn |
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AUSTRALIA |
US |
UK |
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8bn |
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20bn |
20bn |
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FRANCE |
US |
NETH |
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HK |
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35bn |
19bn |
14bn |
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5bn |
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HONG KONG |
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GER |
5bn |
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CANADA |
17bn |
UK |
11bn SPAIN |
10bn GERMANY 9bn |
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20bn |
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CHINA |
3bn |
WHERE IS MOST CAPITAL BEING INVESTED?
Local and cross-border invested volumes (in US$)*
GERMANY
69bn
UK
76bn
US |
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414bn |
31bn |
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NETHERLANDS
21bn
HONG KONG
28bn
US$1 BILLION
US$10 BILLION US$50 BILLION
US$100 BILLION
27bn
WHAT ARE THE MOST POPULAR INVESTMENTS?
Investment |
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SENIOR |
volumes by sector |
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HOUSING |
(US$)* |
OFFICE |
APARTMENT |
RETAIL |
INDUSTRIAL |
|
HOTEL |
& CARE |
330bn |
202bn |
153bn |
140bn |
|
62bn |
20bn |
|
|
|
||||||
|
|
|
|
|
|
|
*12 months to Q3 2018 |
WHO'S BUYING?
Commercial property investment volumes by buyer type (US$)*
INSTITUTIONAL
385bn
PRIVATE/
UNLISTED
289bn
LISTED/REIT
174bn
USER/OTHER
38bn
UNKNOWN
22bn
PropertyGlobalmarketWeal hupdateTrends
FOCUS ON PRIVATE CAPITAL
HOW MUCH IS INVESTED PRIVATELY?
Private investment in commercial real estate has been rising since 2010. Investors looking to diversify their investments are attracted by the secure income plus the ability to actively manage the asset to drive further performance
Volume of private capital investments (US$)* |
Q3 2018 |
$289 BILLION
$300 billion 250 200 150 100 50
0
|
2010 |
2012 |
2014 |
2016 |
2018 |
WHAT DOES PRIVATE CAPITAL INVEST IN?
Volume of private capital investments*
APARTMENT |
OFFICE |
RETAIL |
INDUSTRIAL & LOGISTICS |
HOTEL |
SENIOR |
|
35% |
29% |
15% |
11% |
8% |
HOUSING & CARE |
|
2% |
||||||
|
|
|
|
|
WHERE IS PRIVATE CAPITAL INVESTED?
Top 10 cross-border and domestic investment locations by volume (US$)*
US |
UK |
HONG KONG |
GERMANY |
FRANCE |
|
178bn |
13bn |
12bn |
11bn |
9bn |
|
|
|||||
DOMESTIC SHARE: 96% |
38% |
92% |
|
65% |
96% |
CANADA |
AUSTRALIA |
NETHERLANDS |
JAPAN |
SOUTH KOREA |
|
7bn |
6bn |
6bn |
4bn |
3bn |
|
88% |
51% |
81% |
|
97% |
100% |
WHAT’S NEXT? |
|
|
|
|
|
OF UHNWIS PLAN TO INVEST IN PROPERTY |
|
|
OF RESPONDENTS SAID THEIR |
||
IN THEIR HOME COUNTRY IN 2019 AND 27% |
|
|
CLIENTS INCREASED THEIR |
||
23% PLAN TO INVEST IN ANOTHER COUNTRY |
|
|
34% ALLOCATION TO PROPERTY IN 2018 |
||
Source: The Wealth Report Attitudes Survey 2019
Source: Unless stated, Knight Frank Research using data provided by RCA
36 | KNIGHTFRANK.COM |
37 | KNIGHTFRANK.COM |