KUALA LUMPUR: Mumbai, Shanghai and Sao Paolo are seen by high net worth individuals (HNWI) as the world’s future leading hubs, according to The Wealth Report 2011 launched by Knight Frank and Citi Private Bank.
It noted that these emerging centres are fast catching up current leaders like New York and London. According to the Attitudes Survey in the wealth report, Mumbai will increase in importance over the next 10 years by 118%, Shanghai by 91%, and Sao Paolo by 66%.
The survey represents the views of almost 5,000 ultra HNWI who are clients of Citi Private Bank. The Wealth Report was launched on April 6.
“New York and London remain at the head of The Wealth Report’s Global Cities Index, but respondents to the Attitudes Survey predict that Asian cities such as Shanghai and Mumbai will start to close the gap over the next 10 years,” the report said.
The report also noted that on average, property accounts for 35% of the investment portfolios of ultra HNWI, second in importance only to investments in their own businesses.
Lifestyle and investment are the key drivers for luxury property purchases while education is a growing driver especially among Asian ultra HNWI as 29% of Southeast Asian respondents cite education for children as their main second home purchase reason.
Meanwhile, the report’s Prime International Index (Piri) showed almost 40% of the world’s most exclusive residential property markets surveyed increased in value in 2010 with 17 of the locations recording a rise of at least 10%. The Piri covers 85 prime city and second home locations in 40 countries.
Six of the 10 biggest risers were in Asia, highlighting the region’s continuing economic surge. Established centres such as London and New York also performed strongly. “Luxury property price growth was highest in Shanghai with a 21% rise, while London and New York saw increases of 10% and 13% respectively. Monaco remains the most expensive residential location in the world, followed by London,” the report said.
Some locations however, saw values fall significantly, including Dublin (-25%) and Dubai (-10%).
“The collective worth of the global HNWI community increased by 22% last year, according to data in the 2011 wealth report, so it is not surprising that many of the world’s luxury property markets benefited. The biggest increase in wealth was in the Asia-Pacific which also recorded the biggest increase in property prices,” said The Wealth Report editor Andrew Shirley.
“However, it is not just wealth creation that ensures the international prime property market contains players from more countries than ever before. As we have seen recently in North Africa and the Middle East, a number of major geopolitical shifts are now playing out around the world. These serve to enhance the desirability of true global centres, like London and New York,” he added.
This article appeared on the Property page, The Edge Financial Daily, April 8, 2011.
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