Real estate shows no sign of falling out of favour with wealthy private individuals. On the contrary: according to the Savills/Wealth Briefing survey, the sector is set to grow in importance among this group. Some 53 per cent of wealth advisors surveyed said their clients intended to increase their direct real estate holdings in the next five years.
The return of the speculative development market in recovering real estate markets brings with it a demand for development land, and this is the sector that tops global ‘buy’ intentions. More than half (52 per cent) of advisors at a global level said their client base intended to buy into this sector in the next five years. It is the top real estate sector of choice for both North American and UK UHNWIs and HNWIs.
Residential property remains a status symbol for many, accumulating business bases and leisure property, as well as investment portfolios for income return. Private wealth has a greater propensity to invest in residential than their institutional counterparts. Some 48 per cent of advisors said their clients intend to buy into this sector in the next five years. Residential is the top ‘buy’ for the next five years for Asia-based HNWIs.
Analysis of UHNWI and HNWI investment intentions by geographical region reveals that UK the is currently the top global ‘buy’. Fifty per cent of those surveyed said their clients intend to purchase there in the next five years. This is partly because a high number of global investors are based in the UK and are therefore looking to buy in their homeland or adopted home. Also the British are heavily into direct real estate investment in a way that large investing countries, like the USA for example, are not.
At the opposite end of the spectrum, China and Hong Kong, along with Eastern Europe and CIS, have the lowest proportions of intending buyers. Only 33% are looking in these regions. Along with Latin America, these regions have the greatest bias toward ‘hold’, at a global level.
Source Savills, Paul Tostevin