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Mumbai, Shanghai in luxury property wishlist of ultra HNIs

Jharna Mazumdar, Mumbai, Financial Chronicle

April 07, 2011


Prime property remained incredibly important to the world's wealthiest people and they picked Mumbai, Shanghai and Sao Paolo as the world's future cities, according to the 2011 edition of The Wealth Report, launched on Wednesday by Knight Frank and Citi Private Bank.

On an average, property accounts for 35 per cent of ultra high net worth individual's investment portfolios, second in importance only to investing in their own businesses, the report said.

Global wealth growth and increasing geopolitical turmoil boost international demand for luxury property in key locations.

While high net worth individuals still think New York and London will remain the world's leading hubs over the next 10 years, they think centres in emerging nations are fast catching up.

Mumbai's importance has increased by 118 per cent, Shanghai's by 91 per cent, and Sao Paolo's by 66 per cent, the report said.

Almost 40 per cent of the world's most exclusive residential property markets increased in value during 2010.

Around 40 per cent of the 85 prime city and second-home locations in 40 countries that were analysed by the report's prime international index rose in value during 2010. Six of the 10 biggest ones were in Asia, highlighting the region's continuing economic surge.

According to the report's attitudes survey, lifestyle and investment are the key drivers for luxury second-home purchases, but education is of growing importance, especially among Asian ultra high net worth individuals. For ultra high net worth individuals, who change their main country of residence, tax is the biggest motivator. New York and London remain at the head of The Wealth Report's global cities index, but respondents to the attitudes survey see Asian cities such as Mumbai and Shanghai closing the gap over the next 10 years.

Andrew Shirley, editor of The Wealth Report said, "The collective worth of the global high net worth individual community increased by 22 per cent 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 Asia Pacific (+35 per cent) and that is where we also recorded the biggest increases in property prices."

The Wealth Report includes pricing data for 85 of the world's most desirable residential locations as well as insight from property and investment experts at Knight Frank and Citi Private Bank. Results taken from The Wealth Report Attitudes Survey, represents the thinking of almost 5,000 ultra high net worth individual clients of Citi Private Bank, the report said.