Wanted: ultra-rich property buyers

Wanted: ultra-rich property buyers
Passersby walk on a foot bridge near a luxury residential area at West Kowloon in Hong Kong. The biggest magnet is Hong Kong, which has attracted US$798 billion (S$996 billion) in real estate holdings from ultra high net worth individuals.

Singapore, long seen as a real-estate haven for the ultra-rich, has joined the league of top five cities in wooing the rich into putting their money into brick and mortar.

The biggest magnet is Hong Kong, which has attracted US$798 billion (S$996 billion) in real estate holdings from ultra high net worth individuals (UHNWI). London is second with US$676 billion, followed by Moscow (US$263 billion), Singapore (US$217 billion) and New York (US$164 billion).

Together, these cities account for 40 per cent or US$2.2 trillion of all global real-estate investments by UHNWIs, said a joint report by Savills, global interior design house Candy & Candy and Deutsche Asset & Wealth Management.

Real estate has begun to look more attractive amid increased under-performance of the fixed-income markets and a prevailing caution towards equities, said the report.

Of course, there could be short-term fluctuations in real-estate prices in these mature locations, but the ultra-rich are undeterred from staying invested in them, said Yolande Barnes, the London-based director for world research at Savills.

Residential properties remain the preferred choice of the world's 200,000 UHNWIs, said Savills in a separate report; if these individuals own commercial properties, they do so indirectly through companies or other investment entities.

Savills puts the value of the world's real estate at around US$180 trillion, of which some 72 per cent is owner-occupied residential property.

Of the US$70 trillion that is "investable" and therefore traded regularly - including US$20 trillion of commercial property - over half is bought by private individuals, companies and organisations.

Carlos Arrizurieta, managing director at Deutsche Asset & Wealth Management's Florida office, said that his clients dedicate as much as three-quarters of their investment portfolio to direct real estate.

In Hong Kong, real-estate holdings have been bolstered by the influx of mainland Chinese investors and the city's extremely high property values, said the joint report.

Moscow, on the other hand, has a disproportionately high number of domestic ultra-rich individuals propping up its real-estate market.

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