Specialist commercial property favourite of UHNWI, says Knight Frank

KUALA LUMPUR (MARCH 18): Specialist commercial real estate sector has become an established favourite of ultra-high net wealth individual (UHNWI) investors over the past decade, according to international property consultancy Knight Frank.

The firm’s research – published in its recently-released annual “The Wealth Report 2016” – found that investment items popular among the UNHWI over the past 10 years were in the specialist commercial real estate sector, such as student accommodation, automotive, healthcare and hotels.

However, the wider socio-economic and demographic dynamic mean that the opportunity has been barely exploited, it said.

“For example, demographic upheaval caused by an ageing population will serve to create future market opportunity in the healthcare sector. While such opportunities are currently focused on western markets, the absence of state system of welfare, the rising ability to pay for private provision, and the sheer weight of demography will open up the emerging markets too,” the report stated.

Apart from that, the consultancy firm said more private capital from Malaysia, Singapore, Hong Kong and China are buying commercial property in key western markets, such as the UK, Australia and the US.

“Asset classes showing growth prospects in locations that provide transparency, wealth preservation, liquidity and security will be most in demand. The expansion of interest in commercial property from a swelling population of wealthy individuals has perhaps been the most notable. Assets in the key western markets will continue to be targeted by Asian private investment,” the report showed.

Knight Frank defined a UHNWI as someone with a net worth of over US$30 million (RM121.4 million), excluding their primary residence.