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US$217b in UHNW real estate investment pumped into Singapore
Singapore has been identified as one of the biggest recipients of global private real estate wealth, according to a new report published by Candy&Candy, Savills World Research and Deutsche Asset & Wealth Management.
A total of five cities, namely Hong Kong, London, Moscow, Singapore and New York, account for 40 percent (US$2.2 trillion) of all global UHNWI real estate holdings. Hong Kong, with the weight of mainland Chinese investment pushing at its borders, receives the most (US$798 billion) followed by London, the city identified as having the broadest global reach (US$676 billion). As for Singapore, the city-state is in fourth place with US$217 billion.
"Singapore is highly regarded as an international centre of business and finance, and attracts real estate investors from across the Asia Pacific region, with particular concentrations from China, Malaysia and Indonesia," said the Candy GPS report.
At the same time, Germany, Japan and the US have topped the list of global locations with the highest value of direct real estate investment by UHNWIs. Together they account for 39 percent of all UHNWI global real estate holdings.
Meanwhile, 12 rising cities across the globe are set to out-perform the real estate markets in prime world cities in the coming years as global investors seek alternative locations, the report noted.
Prices in these cities are generally much lower than in the world cities, making them more accessible and attractive to yield-seeking property investors.
The list of cities range from well-established hubs such as Melbourne, Australia, to centres in developing economies such as Chennai, India, that have a high number of UHNW residents.
New frontiers table. (Source: Candy GPS report)
Yolande Barnes, Director, Savills World Research, who conducted the analysis said: "As prime real estate in many premier cities has become more fully valued, emboldened investors are now spreading their wings and looking for high-yielding secondary properties in those cities as well as starting to consider the value of second-tier cities in countries with strengthening economies.
"This more adventurous approach is likely not only to provide higher income returns but also the opportunity for significant capital growth. Real estate values will grow as new cities all over the globe rise on fortune's wheel. Property rents and values will rise in line with new and growing economic strength."
Aside from economic reasons, the report highlighted certain characteristics that add to the attractiveness of these cities, such as English as a first or second language; the presence of new tech industries and financial centres; favourable conditions for international companies; and a large, young well-educated population.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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