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Global wealthy individuals becoming increasingly strategic in response to their overseas investment

In this article, UKLEJU have looked at Knight Frank City Wealth Index, and refined where the wealthy are investing at the world’s leading cities in order to generate more of the detailed insights that overseas investor rely on and identify what matter most to them.

Ultra-high net-worth individuals (UHNWI) are defined as people with investable asset of at least $30 million. The word, UHNWI comprise the wealthiest people in the world and control a disproportionate amount of global wealth. Using data from the specialists of GlobalData Wealthinsight, UKLEJU found out that the biggest growth in UHNWI (Ultra High Net Worth Individual) will be in Asian countries over the next five years, eight of the top ten countries by future growth are in Asia.


Asia is the biggest hub for billionaires, with numbers set to rise above 1,000 by 2023, accounting for more than a third of the world’s billionaire population of 2,696. China has seen a sharp rise in the number of billionaires in the last five years, but growth looks set to moderate in the medium term. There are marked geographical differences. In North America, financial assets are a major growth driver at the moment. The great example of this is the American economies are particularly affected by fluctuations in the US dollar exchange rate. In Europe and Asia, real estate is most important.

As a result, these wealthy individuals decided to invest in additional homes in London city and the rest of UK where they can see greater levels of stability. UK’s Real estate market are cyclical and linked to many factors, overseas buyers always wait for the right opportunities to maximise returns, avoiding unnecessary market and asset risk. In order to understand what the wealthy are investing in the years to come, it is important to consider current economic growth and geopolitical challenges. UHNWI (Ultra High Net Worth Individual) are becoming increasingly strategic in response to global uncertainty and political upheavals.

Non-financial assets
Real estate remains a significant wealth preservation asset class in the UK. Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time.

Education
There are some key decision influencers which will affect investor’s views. Education is a significant driver for purchases of first and second homes globally. Chinese investors are typically attracted by world class education opportunities for their children, new business ventures and stable investment returns.


Surrounding
Security is another key factor, as are luxury indicators including the number of five star hotels and the quantity and quality of leading restaurants. London leads, due to the high number of high rating hotels, in total there are 76 five stars hotels in the UK, ranking is high for luxury dining and is the safest city.

Investment
Following global trends and opportunities, there is an increasing enthusiasm and consideration for more specialist sectors, such as healthcare the private rented sector. In terms of sectors, commercial market and hospitality remain preferred segments.


Broad innovation
UK cities’ broad ecosystem of innovation offers multiple opportunities for future growth, reflected in the rise of new age technology companies across sectors including artificial intelligence, food tech, fintech and robotics.

Language/ Immigration
Chinese buyers always look at familiar global markets, such as London, Sydney, Melbourne and Hong Kong, which offer language advantages and immigration possibilities as well as remaining outside any trade disputes.

Political Concerns
The worsening trade relationship between China and the US may cause Chinese investors to shift their presence into other key markets such as London.
When considering the cities of the future, factors such as innovation indicators, wealth forecasts and economic growth will affect investor’s confidences for future property investment.

Conclusion

London remains the top investment spot, followed by other European cities, such as Berlin. This is driven by stability, transparency, liquidity, good returns and cost of debt.

On the other side for overseas buyers, Asia’s growing prominence is confirmed, with Hong Kong and Singapore taking third and fourth positions respectively.


However, it is worth noting that with a politic toward the end of 2019, there could be further economic changes that may impact outward flows. The decision where to invest is a complex one driven by a range of factors, not least familiarity with the market in question and a good understanding of its dynamics.

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