The Wealth Report.

Global Wealth Trends

With the rise of populist movements in certain countries, the ultra-high net-worth individuals (UHNWIs) may prefer to invest in more stable locations. The UK’s departure from the EU enables wealthy nations from the North Sea and Baltic coastlines to attract investors. It is predicted that most future growth in energy will be for gas and electricity. UHNWIs must consider the geopolitical implications such as the political stability of some mineral-producing countries when investing.

Five Cities Set to Grow in Prominence in the Coming Years

Based on wealth, investments and lifestyle, the Knight Frank City Wealth Index predicted growth in the following cities (in particular order):  London, New York, Hong Kong, Singapore and Los Angeles.

Future Cities

Cities that support wealth creation — including innovation indicators, wealth forecasts, economic growth and infrastructure improvements — are likely targets for future property investment. Bengaluru, Hangzhou, Stockholm, Cambridge and Boston are five urban centres across the world that are believed to increasingly attract investors in the coming years.

100 Luxury Residential Markets

In 2018 the value of the 100 luxury residential markets increased on average by 1.3% in 2018, down from 2.1% in 2017. Manila was the world’s top performer. Sydney remained one of the world’s best-performing cities for high-end real estate despite drops in prices. Other headliners included Edinburgh, Berlin and Munich.

Global Real Estate Opportunities

In the face of stock market volatility, a catastrophe bond is one way to diversify. As the global economic burden of disease continues to escalate, demand for medication will grow. Investors may find that there is more upside to buying dedicated semiconductor makers or 5G network specialists than in the broader tech sector like the Internet of Things.

Key Commercial Property Investment

Up to Q3 2018, US$907 billion were invested in commercial real estate, globally. North America was the largest source of cross-border real estate investment capital, with the majority focused on investing within the US. Offices are the most popular investments with US$330 billion. The biggest buyer is the institutional investors, followed by private investors, and lastly, listed corporations.

Portfolio Management

Commercial real estate maintains a very healthy level of investor demand. There are two types of drivers which apply almost regardless of timing within the market cycle: macro (low interest rates, the rise of global savings, the growth of real estate mega funds and reduced capital controls and regulatory hurdles) and micro drivers (performance advantage, opportunity to enhance income returns through asset management, deep liquidity and non-fungible).

The New World

The next 12 months will see a shift in global property markets, with global residential markets experiencing lower price growth. Investors will change their real estate investment strategies to secure outperformance as debt costs rise.

Blockbuster

Blockchain could redefine the perception of value in the art and luxury collectables market as it provides an easily consultable public record. The public and permanent nature of blockchain also enables fractional ownership which opens up a traditionally exclusive world to a more diverse audience. The luxury goods market is fraught with challenges, but its proponents believe blockchain could help.

Where the Wealthy Live

In terms of country, the US has the highest number of UHNWIs in 2018, with Japan and Germany in second and third respectively. City wise, London has the most UHNWIs, followed by Tokyo and Singapore. These three cities are set to retain their position in 2023. Mumbai and Delhi are projected to have the most percentage increase of UHNWIs in 2023.

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