World's tycoons have a penchant for property, finds study
15 January 2014
The world's super rich hold a fifth of their wealth in property, with real estate holdings estimated at $5,328 billion, a study released today says.
According to the survey by international real estate advisor Savills in association with Wealth-X, property accounts for about a fifth of the invested wealth of almost 200,000 ultra-high net worth individuals (UHNWIs) in the world. Of the total private wealth of $27,770 billion, 19 per cent is held in real estate assets, it said.
Europe's super rich hold the biggest share of all privately owned real estate assets, followed by Asians. Rich people in Europe hold 31 per cent of their wealth in real estate assets worth $2,391 billion, followed by Asia (27 per cent at $1,800 billion) and the Middle East (26 per cent at $880 billion).
"Global real estate is mostly residential and held by occupiers, but private owners are becoming more important in the world of traded investable property," said Yolande Barnes, head of Savills world research.
She said that since the North Atlantic debt crisis of 2008, sovereign wealth funds, wealth management companies, private banks and family offices have stepped into property deals that corporate bankers have deserted.
According to Savills, the total value of the world's real estate is now around $180 trillion, 72 per cent of which is owner-occupied residential property.
Of the $70 trillion that is 'investable' and therefore traded regularly - including $20 trillion of commercial property - over half is being bought by private individuals, companies and organisations.
According to Mykolas D Rambus, chief executive Wealth-X, the UHNW population is expected to grow 22 per cent by 2018 and its combined wealth - currently $27.8 trillion - is expected to total over $36 trillion by 2018.
"This presents huge opportunities for those involved in global real estate investment to create the right product in the right locations," Rambus said.
About 3 per cent of the world's total real estate value, or $5.3 trillion, is owned by UHNWIs.
This wealthiest 0.003 per cent of the world's population has real estate holdings which are worth an average of $26.5 million each, according to the report.