Property remains Malaysian ultra-rich's favourite asset, says Knight Frank

KUALA LUMPUR (March 15): Property remains a hugely important element of Malaysian ultra high net worth individuals' (UHNWIs) investment portfolios despite the sharp decrease in the number of Malaysian UHNWIs, said independent global property consultancy Knight Frank.

“There are 35% of (Malaysian UHNWIs’ investment) portfolio allocated to property. We know property is extremely important for Asians, especially to Malaysian UHNWIs. Malaysian (UHNWIs) always have more property  than (other) Asian countries,” said Knight Frank Asia Pacific head of research Nicholas Holt during the launch of “The Wealth Report 2016” here today.

Knight Frank defined a UHNWI as someone with a net worth of over US$30 million (RM124.3 million), excluding their primary residence.

According to the report, Malaysian UHNWIs have dropped by 15% to 993 in 2015, the most in the 14 surveyed countries. 

However, 65% of Malaysian UHWNIs have increased their assets in residential property in the past 10 years, and a similar percentage are ready to increase their allocation for properties in the next 10 years.]

“In fact, 39% of Malaysian UHNWIs are considering residential purchase in 2016, while only an average of 29% of UHNWIs worldwide are considering that,” Holt noted, adding that Malaysian UHNWIs own more properties on average.

The report showed Malaysian UHNWIs own 4.7 properties on average, while the global average is 3.7 and Asia's average is 3.92.

Knight Frank Malaysia managing director Sarkunan Subramaniam said Malaysians continue to put more faith in brick-and-mortar because property has given them very good returns over the last decade.

“We believe property will continue to do so (giving good returns) in the next 10 years. Property has consistently outperformed many other asset classes in Malaysia,” Sarkunan reckoned.

He also said Malaysian UHNWIs are interested on overseas properties, especially in Australia and the UK.

Knight Frank Malaysia international project marketing senior manager Dominic Heaton-Watson said that London and Melbourne both are the favourite property investment cities for Malaysian UHWNIs.

“They (Malaysian UHNWIs) love London and Melbourne for their higher education standard, business environment, geography strength and it is a safe haven. Generally, this trend has not changed over the years,” Heaton-Watson.

Besides residential, Knight Frank Malaysia capital markets executive director James Buckley said Malaysian UHNWIs are also eyeing overseas commercial property, while it is also one of the preferred commercial property investment targets for global UHNWIs.

“Kuala Lumpur is seeing rising new supply of commercial properties in 2015 and 2016, and we do see a gradual increase in interest from ultra-wealthy Malaysians in commercial properties, mainly targeting Malaysia, the UK and Australia,” he said.

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