London has topped Knight Frank’s 2019 City Wealth Index, reclaiming the spot from New York, showing that regardless of what happens with Brexit the UK remains the leading global wealth centre for 2019.
Knight Frank’s Wealth Report reveals that the world’s wealthiest continue to get wealthier, with the population of global ultra-high-net-worth individuals set to grow by more than 22% over the next five years. This year will also be the first time that the number of millionaires (in US dollars) exceeds 20m.
And for the real estate community, the ever growing wealth is continuing to be invested in property, with 31% of all global commercial real estate transactions involving private capital. KF found that the UK is the number one destination for cross-border private capital investment and that 21% of UHNWI planned to invest in commercial property this year.
William Mathews, head of capital markets research at Knight Frank, said: “We expect that the appetite from private investors for commercial property will continue to increase as the number of wealthy individuals grow. Increasingly we are advising our private clients not only on prime office, retail and hotel assets but also on strategic investments in growth sectors such as urban logistics, leisure and specialist operating assets including student and multi-housing.”
Residential markets
In terms of best-performing luxury residential markets, Edinburgh took second place in Knight Frank’s Prime International Residential Index, with prices increasing by 10.6%. It was just behind Manila, which topped the ranking, with prime residential prices increasing by 11%. London did not make it into the top 10.
Kate Everett-Allan, head of international residential research at Knight Frank, said that only five of the top 10 cities recorded double-digit growth in values last year, compared with 11 cities in 2017.
Knight Frank global head of research Liam Bailey added: “What stands out for me this coming year is that despite a darkening economic outlook, wealth creation will remain a constant in 2019, with the global UHNWI population set to rise by more than a fifth over the next five years. The wealthy will continue to demand access to global markets, especially as emerging economies see growth rates slow and the search for diversification grows.
“As wealth moves more rapidly around the world, investors will become increasingly active in their investment strategies. Rising interest rates and the end of quantitative easing mean we are reaching the end of the “everything bubble”. In the past decade it was enough to buy classic cars, art or property and the generosity of central banks would help deliver supercharged returns. As this process unwinds, property investors will become increasingly focused on income, asset management and development opportunities.”
Read the Wealth Report in full >>
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