The global perspective on prime property and wealth

The Wealth Report

The
Wealth
Report

2015
www.knightfrank.com/wealthreport 2015
 3 the wealth report 2015

Welcome to the
2015 edition of
The Wealth Report

Andrew Hay
Global Head of Residential
[email protected]
+44 20 7861 1071

It is clear that 2015 will be a remarkable year in terms tivity, wealth migration and luxury spending trends.
of political and economic fluctuations, making it Our Attitudes Survey adds depth to our analysis
harder than ever to predict investor sentiment and by delving deep into the views of the wealthy regard-
the resulting wealth flows. ing investment risks and opportunities. Our coverage
We are fortunate in being able to draw not only of the worlds premier luxury residential markets
on a network of over 350 offices, but also the views has been expanded to include 100 cities and second-
of thousands of active clients and investors, together home destinations. And our focus on investment
with the expertise of our agency and consultancy opportunities covers the world.
teams, including those advising on alternative The scope and the ambition of the report is
property sectors, such as healthcare, agriculture and reflected by Knight Franks growth. In the last year
student housing. we have formed a strategic residential relationship
I am delighted that in this edition of The Wealth with Douglas Elliman covering New York and the
Report we share the first-hand investment perspec- key luxury home hotspots in the US. We have also
tives and experiences of Massimo Ferragamo and established new offices in Chamonix, Provence,
Goodwin Gaw. In addition, the report also features San Remo, Venice, Sardinia, Marbella and Taipei,
the latest research from leading wealth analysts and as well as opening five new offices in the UK.
commentators. Through our partnership with The reach and influence of The Wealth Report
WealthInsight, for example, we can offer an analysis continues to grow. We hope you find our latest find-
of wealth distribution trends covering almost 100 ings and forecasts both informative and inspiring.
countries and over 100 cities. Contributions from If we can provide you with further research or advice
NetJets, Fragomen and Ledbury Research allow us to we are of course happy to help and look forward
focus on the critical issues of global travel and connec- to hearing from you.

The Wealth Knight Frank Winkreative Photography Definitions

Report 2015 Editor Creative Director Portraits of Andrew UHNWI

Andrew Shirley Maurus fraser Hay and Liam Bailey Throughout this report, we use
taken by John Wright UHNWI as an abbreviation for
Commissioned by Global Head of Art Director at The Corinthia ultra-high-net-worth individual.
Andrew Hay Research LESLIE KWOK Residences, Whitehall, Unless otherwise stated, an UHNWI
liam Bailey London, courtesy of is defined as someone with a net
Written by Designer Simon Naudi worth of over US$30m.
Knight Frank Marketing & PR MATT Le gallez
Bronya heaver PRIME PROPERTY
Research Illustration
Art Buyer The most desirable and most
Designed by Rhiannon nicol expensive property in a given
Lyndon Hayes
WINKREATIVE
location, generally defined as the
Michael Kirkham
Account Manager top 5% of each market by value.
Jol Penkman
Emilie aagreen Prime markets often have a
Printed by Jim Spencer
significant international bias
PUREPRINT
in terms of buyer profile.
contents 4 5 the wealth report 2015

For me the
P20
slump in oil
06 prices that
started
World in numbers in 2014 is a
game changer
for the
Highlights from the key research findings of the 2015 edition of
The Wealth Report, including Attitudes Survey, PIRI, Global Cities economy, 46
Survey and wealth distribution data P63 and also for
property
investment
Property investment
08

Attitudes Survey
Tangible assets prosper ten to watch
The total amount of money Knight Frank experts highlight
P48 invested into commercial 10 trends and sectors UHNWI
property rose to around investors should be aware of
$619bn in 2014. Private inves- PP5255
Wealth worries NO place like home
P41 tors accounted for $153bn of
81% of advisors say their Just over 25% of UHNWIs are
that P49
clients are worried about considering buying a new
tax hikes P10 home in 2015 P12

P28 58

Luxury spending trends

16

Global wealth
distribution Rule Britannia
The UK tops our new Big
Vroom, vroom
Classic cars are still the top
Spenders Index, followed performers in our Luxury
by China and Qatar P60 Investment Index, rising in
Wealth rise African surge
value by 16% in 2014 P62
The total number of UHNWIs The Ivory Coast will see
rose by almost 5,200, or 3%, Africas largest 10-year
in 2014. Their population is increase in UHNWI numbers 66
set to grow a further 34% by with forecast growth of 119%
2024 P18 P21
Databank
26
Wealth distribution data in detail P66

Global cities
Attitudes Survey responses by region P68
P12

70
london calling where the rich live
The UKs capital city holds
off New York to take the
A graphical representation of
UHNWI wealth population data Final word
top spot in our 2015 Global for over 100 cities across the
Cities Survey P28 world P30
Liam Bailey, Knight Franks Global Head of Research, highlights
the implications of The Wealth Reports latest findings for
UHNWIs and their advisors
34 Growing
wealth
PIRI 2015 creation has led
to an increas-
ing number of
The Big Apple shines Room with a view
New York tops our PIRI 100 Monaco once again tops our buyers from an
index with prime residential list of the worlds most ever-widening
price growth of almost 19% in expensive prime residential list of countries
2014. Overall, the index rose by property. US$1m will buy you Contributors and interviewees
just over 2% P37 just 17 sq m of home there, purchasing
compared with 204 sq m in property in a
Liam Bailey Andrew Shirley Grinne Gilmore James Roberts Madelaine Ollivier
Cape Town P39 growing Global Head of the Wealth Head of UK Residential Chief Economist, Analyst, Ledbury
number of Research, Knight Frank Report Editor, Research, Knight Frank Knight Frank Research
P49 Knight Frank
global hubs Foremost prime Former economics Leading commercial Luxury goods commentator
property expert Luxury investments correspondent, The Times property expert and researcher
commentator

Claire Adler Massimo Ferragamo Goodwin Gaw Kate Everett-Allen Dr Pippa Malmgren
P38 Luxury jewellery Chairman, Chairman, Gaw Capital Head of International Founder, DRPM Group
consultant Ferragamo USA One of Asias leading Residential Research, Economist and former
Writer, PR advisor, Scion of leading property investors Knight Frank US presidential advisor
speaker fashion dynasty Authority on international
residential markets
world in nUmBerS 6 7 the wealth report 2015

Highs and lows: key statistics

The Wealth Report contains a huge amount of data, not only from knight
franks own research teams, but also from leading industry analysts and
commentators. the map below includes a worldwide snapshot of the

from The Wealth Report 2015

numbers drawn from our piri 100 index; the wealth distribution data
supplied by wealthinsight; the results of our global cities Survey and the
findings of our unique annual attitudes Survey.

18.8%
global trends

61%
the largest prime
residential price rise, 17.3 sq m
01 03
of russian UHnwis are
seen by new york
sending their children
the area of prime overseas for their
$20.8tn londons ranking in our
property Us$1m will buy
in monaco
secondary education
Hong Kongs ranking in
2015 global cities survey our 2015 global cities
survey the top Asian
location
Attitudes
the total wealth
global
held by UHnwis Piri cities
Piri

global
172,850 cities

the total number

of UHnwis worldwide

15%
3% of latin American UHnwis

42%
are thinking of changing
their country of residence

global of Australasian UHnwi

increase in the
wealth investment portfolios
number of UHnwis
are allocated to property
2013 to 2014
Attitudes

Attitudes
Property

$153bn 50,767
the number of Us
UHnwis predicted global 52%
the estimated commercial in 2024 wealth global
property investment by the proportion of wealth
private individuals Property UHnwis from
the UAe who are
considering buying a
new home in 2015
Piri

82% -15% $0.2tn

the greatest drop
in prime residential
the total wealth held by
1.8m sq ft 1,752
African UHnwis in 2014
prices, seen by the growth in
% of wealth advisors Buenos Aires
reporting the net worth the area of First-world singapores UHnwi
of their UHnwi shopping malls set to population, 2014
clients increased open in nairobi in 2015 to 2024
attitudes survey 8 9 the wealth report 2015

A global guide to
UHNWI wealth, attitudes
and investments

The Wealth Report

Attitudes Survey
The world is becoming increasingly preoc- this trend would continue for their 01
cupied by the lives of the rich and famous; clients in 2015. Getting richer
the more sensational the detail the better. But with contributors from all parts according to the results of the
fuelling this trend is the growing of the world, the results of our Attitudes attitudes survey, 80% of wealth
omnipotence of an internet that streams a Survey highlight some revealing advisors expect their clients
net worth to increase in 2015
non-stop flow of gossip and photographs, regional trends.
authorised or not. Some of the super-rich, Generally, UHNWIs living in Austral- 02
those whose wealth derives from their asia seem happiest with their lifestyles
The joy of property
celebrity status, actively encourage it, only 4% want to change their country of over a quarter of uhNwis are
but for most the intrusion is unwelcome. residence or domicile, and very few send thinking of buying a new house
No wonder then that the distinctly their children overseas to be educated. in 2015, while 35% of those
un-voyeuristic results of our own annual By contrast, a third of those from russia surveyed expect their clients
to increase their allocation to
survey of the attitudes of the wealthy, and the cIS are considering a move, and
property investments during
discussed over the following pages, reveal over 60% dispatch their children abroad the year. in certain regions of
that ultra-high-net-worth individuals are for their secondary education. the world up to a third of the
becoming increasingly concerned about The results of the Attitudes Survey also super-rich are thinking of
the power of the web in terms of online cement the position of property as the cor- changing their domicile or
privacy and cyber-crime. nerstone of many UHNWI investment stra- country of residence
Interestingly, however, given a tegies it accounts on average for almost a 03
potential economic slowdown in china third of UHNWI portfolios. But bricks and
The collecting bug
and continued political and economic mortar are not the only tangible assets that
over 60% of survey respondents
uncertainty in many parts of the world, it are in demand. So-called investments of reckon their clients are becoming
is family and business succession issues passion, such as art, wine and classic cars, more interested in collecting
followed by a possible hike in wealth taxes continue to attract more interest. investments of passion
that are the biggest concerns for UHNWIs, While our survey doesnt delve into the
according to the wealth managers and more personal facets of UHNWI lifestyles,
private bankers who advise them. it provides an invaluable glimpse of their
putting these concerns aside, 2014 attitudes towards property, investments
was a good year for the wealthy. The vast and the factors affecting their ability to
majority saw their net worth increase, and increase and safeguard their wealth, and
most of the respondents to the survey said how those factors vary around the world.
attitudes survey 10 11 the wealth report 2015

Wealth monitor

respondents were asked how their clients

wealth had changed during 2014 and how
they thought it would change in 2015

2014 Change
Wealth trends region % increase

The latest findings from The Wealth africa

Reports annual Attitudes Survey of 89%
UHNWI advisors
asia
ANDREW SHIRLEY, 74%
THE WEALTH REPORT EDITOR
australasia
81%
The fifth instalment of The Wealth expect their clients wealth to grow further europe
Reports annual Attitudes Survey is based in 2015 (see p18 for our detailed predic- do younger uhNwis spend 74%
more on luxury goods than
on a detailed survey of almost 500 leading tions on global wealth creation over the latin america
their parents?
private bankers and wealth advisors from next 10 years). 87%
across the globe, and reflects the attitudes
Middle east
of their ultra-wealthy clients who have a 88%
combined wealth of over US$1.7tn. wealth threats
North america
covering many aspects of the lifestyles
100%
of ultra-high-net-worth individuals (those However, the road to greater riches is not
with a net worth of over $30m), from always simple, and the survey results russia/Cis

wealth creation to philanthropy, from highlight a number of issues that UHNWIs 33%

property investments to luxury spend- believe could hinder their ability to gener-
wealth has decreased
ing trends, the surveys findings offer a ate more wealth. Interestingly, it was not 66% wealth has remained the same
unique insight into the attitudes of the the global geopolitical and economic wealth has increased
super-wealthy. issues that tend to spook stock markets BriGht Future Most wealth advisors expect their clients wealth to increase in 2015
25%
last year proved to be a more profit- that were of the most concern, but more 2015 outlook
able one for the worlds UHNWIs than personal issues.
9% region % increase
expected by their advisors. In 2013 when on average, less than half of respond- concerned about the handover of family activities to increase; in this years survey
we asked the surveys respondents about ents said their clients were concerned wealth to the next generation. the figure was 22%, with three-quarters africa
their clients wealth creation prospects about the impact of the chinese economy spend more
A potential increase in wealth taxes predicting they would remain the same. 82%
over the next 12 months, 63% said they dipping (although unsurprisingly this spend the same (81%) and increased government scrutiny The outlook for a rise in giving was most
asia
thought their net worth would increase. rises to over 70% in Asia and 67% in spend less of wealth (80%) were the second and third pessimistic in more mature economies
75%
A year later 82% said it had actually neighbouring Australasia). The same pat- most vexatious issues, according to our like europe (17%), perhaps because
increased during 2014, with only 3% tern was repeated for the ongoing turmoil survey results. respondents from Aus- philanthropy is already well established australasia

reporting a fall. in the Middle east and Ukraine. tralasia were the least concerned about there, compared with emerging economies 69%
source: the wealth report 2015
looking forward, the outlook is still family succession issues were, in attitudes survey
increased government scrutiny, with only like Africa (36%). europe
bullish. Despite concerns over the global fact, the number one worry, with 85% 44% flagging it as a threat. As part of this years Attitudes Survey 71%
economy, 80% of survey respondents of respondents saying their clients were The growing power of the internet, we have endeavoured to find out if younger latin america
both in terms of cyber-crime and the abil- UHNWIs have a different attitude to wealth 85%
ity to invade privacy and damage reputa- than their parents generation. When asked Middle east
tions, led 76% of respondents to highlight if they were more philanthropic, 45% of 77%
Wealth worries it as an area of concern. respondents said yes.
North america
By contrast, when we asked if they
the issues uhNwis believe could affect their wealth, lifestyles or business 100%
spent more on luxury goods, two-thirds
russia/Cis
Philanthropy, shopping, ying of those taking the survey agreed that was
44%
the case, perhaps explaining why succession
UHNWI attitudes to philanthropy remain planning is considered such a big issue.
wealth will decrease
largely unchanged. According to last overall, 30% of survey respondents are wealth will remain the same
years Attitudes Survey, 21% of respond- expecting their clients to splash out more wealth will increase
ents expected their clients philanthropic on luxury goods this year, compared with
2014, with UHNWIs from Africa (39%)
source: the wealth report 2015 attitudes survey
enjoying their wealth the most.
health/environment issues

percentage of respondents who think their The use of private jets is growing stead-
younger uhNwis are more philanthropic than ily around the world, with demand rising
wealthy by government

political interference

Crisis in Middle east

economic slowdown

their parents generation THE WEALTH REPORT

increased scrutiny of

most quickly in Asia 38% of respondents

in russia/ukraine
political situation

ATTITUDES SURVEY
succession issues

potential increase

Chinas potential

said their clients were increasingly using

Cyber-crime and
Family/business

in wealth taxes

online privacy

them for business and leisure purposes the results of the attitudes survey are
(see our special feature on p40 for more). based on the responses from almost 500
private bankers and wealth advisors who

45%
85%

81%

80%

76%

68%

66%

51%

51%

49%

completed a survey in late autumn 2014.

the global gures are weighted to reect the
homes, vineyards, migration regional distribution of uhNwi wealth popu-
lations. a full regional breakdown of the
Across the world, 23% of the wealth on av- data is available in databank at the back
data refers to number of survey respondents who
said each issue was of concern to their clients
erage of UHNWIs is accounted for by their of the report.
source: the wealth report 2015 attitudes survey main residence and any second homes not
attitudes survey 12 13 the wealth report 2015

Allocation to property in UHNWI investment portfolios How is the allocation changing?

australasia 42%

Middle east 40%

35%
asia 38% 37%

europe 33%

2015 forecast
africa 31%
55% 54%

2014
owned purely as an investment, according russia/Cis 27%
8% 10%
to our survey results. In Australasia and
Asia the proportion edges up to almost latin america 26%
30%. Just over a quarter of UHNWIs are
considering purchasing another house in allocation increase
North america 24%
allocation remains the same
2015 to add to the three they already own. allocation decrease
When we asked our respondents if any
of their clients were particularly interested source: the wealth report 2015
attitudes survey
in a ski, vineyard or equestrian property,
a few interesting trends emerged. The de-
mand from Asian UHNWIs for vineyards
remains keen, with 40% of respondents
with clients in china, 43% in Taiwan and
31% in Malaysia noting rising interest.
MasterClass art is the most popular investment of passion, according to the attitudes survey
property type. (See pp46 to 57 for more one of the outside property, equities are pre-
In Africa (29%) and the Middle east on property investment trends.) most revealing dicted to be the most popular investment PERCENTAGE OF
(40% in the UAe) equestrian properties control of their property investments class in 2015, with a net balance of 45% of UHNWIS LIKELY TO
questions SEND THEIR CHILDREN
are more of a draw, while a ski chalet is is clearly important to the wealthy posed by those taking the survey expecting their OVERSEAS FOR
THEIR SECONDARY
the top priority for wealthy second-home longer-term trend is emerging. investing, collecting almost 80% of respondents said clients exposure to stocks and shares to
the survey EDUCATION
seekers from europe (35%) and North Globally, tax was highlighted as the UHNWIs prefer to invest directly into increase in 2015. This builds on the grow-
relates to the
America (50% in the US). main reason UHNWIs would consider of course, property is not just a place property, with only 12% choosing to use ing appetite for riskier investments that
one of the most revealing questions moving to a different country, but in rus- where the wealthy live. It is increasingly a fund vehicle. number of the Attitudes Survey flagged up last year.
posed by the survey relates to the number sia education and political issues were seen as a mainstream investment class, Bricks and mortar retain their appeal Uhnwis who consequently, according to the survey
of UHNWIs who are planning to perma- reported as two of the biggest drivers. accounting on average for 32% of an for the latest generation of UHNWIs, with are planning results, cash, fixed income bonds and
australia
nently change their domicile or country Seeking out the best education abroad UHNWIs investment portfolio. Globally, 45% of respondents saying their younger to permanently gold and other precious metals are likely
of residence.
Australians and New Zealanders are
for their children is clearly very important
for russian and cIS UHNWIs. over 60%
37% of survey respondents said their
clients increased their exposure to prop-
clients were more interested in property
than their parents.
change to see a declining demand this year.
Investments of passion, however,
3%
their domicile
the least likely to want to up sticks. only are likely to send their offspring overseas erty as an investment in 2014 and 35% or country remain firmly on the radar for the super-
4% of those surveyed said their clients for their secondary education, compared expect that trend to continue in 2015. of residence rich. Globally, 61% of our respondents
were considering a move. By contrast, with a global average of 27%. This process residential property is the most percentage of uhNwis who are becoming said their UHNWI clients were becoming
a third of respondents with clients in the also seems to be happening sooner, with popular sector to invest in, with 81% of more interested in investments of passion more interested in the likes of classic
russia/cIS region said a move could be 67% of respondents noting that their wealth advisors saying their clients were cars, art and wine. China
on the cards. This follows a response rate
of 35% in last years survey, suggesting a
clients were sending their children
overseas at an earlier age.
becoming more interested in it. offices
(59%) were the next most popular
Art is the luxury asset where interest
is rising the most perhaps unsurpris- 42%
ing given its accessibility followed by
watches, wine and classic cars. Stamps
arouse the least passion around the
House hunting Emigrating

61%
world, but there is a noticeable difference
respondents were asked what percentage respondents were asked what percentage of their in Africa and Asia, where 14% and 8%, russia
of their clients were considering purchasing clients were considering permanently changing respectively, of survey respondents noted
a new home in 2015 their domicile or country of residence
increasing interest. Drilling down, the 50%
figure rises to 17% for china.
This matches the recent rise in prices

source: the wealth report 2015 attitudes survey

africa 23% africa 11%
for Asian and commonwealth stamps.
asia 22% asia 12% for more on the performance of luxury
australasia 15% australasia 4%
percentage of respondents who said investments turn to p62.
their uhNwi clients were more interested Despite collectable assets commonly
europe 24% europe 14% in collecting:
being described as investments of pas-
latin america 28% latin america 15% sion, personal pleasure is still the main
art wine stamps motivation for their acquisition, accord-
Middle east 36% Middle east 10%
ing to 62% of those surveyed. In India,
North america 31% North america 7% however, status (38%) was considered
russia/Cis 21% russia/Cis 33% almost as important, and across Asia
capital growth (32%) was a key factor.
63% 48% 3% For full regional results see Databank,
source: the wealth report 2015 attitudes survey pp6869.
attitudes survey 14 15 the wealth report 2015

As an
investor you
should
devote your
attention to
things that
a) matter, and
b) you can do
something
about

Wealth trends under Philanthropic attitude change Overseas education ment proposition it is always possible
to commission a new yacht, but nobody
for succession, taxes, government scru-
tiny and privacy/security. Or at least their
the microscope Millennials (to use the new parlance for
under-40s) take seriously the notion
Recently, leading public schools have start-
ed to insist overseas applicants complete
can paint another Monet or build a classic
Ferrari. Increasing demand and limited
advisors think they are which may not
be quite the same thing.
of stewardship and social responsibility. at least two years in a UK-based prepara- supply suggest that capital growth could
This may not be news, exactly, but what tory school. Clients from areas that are continue. There are risks, however, like Dr Greg B Davies, Head of
differentiates millennials from their already well represented in the independ- fraud and poor portfolio diversification. Behavioural Finance, Barclays
parents is the inclination to use robust ent system, such as Russia, Nigeria and To remove some of these risks, inves-
and/or sophisticated management tech- the Middle Eastern states, have realised tors should express their views on luxury
niques for family philanthropy. The steel the dramatic effect that an earlier move through a multi-asset solution. Online perils
magnate model of philanthropy is giving to a UK school can bring. Leading public
way to that of measuring impact not only schools carry out rigorous preassessments Saeed Patel, Investment Analyst, A reputation is an individuals most valu-
through the aforementioned implementa- when children are 10 or 11. Preparing for Schroders able asset, and in an increasingly digital
tion of business models for philanthropy, these tests from within the system greatly age, cyber-crime and online privacy are
but also through the use of metrics to increases a students chance of success. For big concerns. We are increasingly being
evaluate the potency of value-informed all these reasons, we are seeing renewed Attitudes to risk asked by high-net-worth individuals how
Leading wealth experts share investments. While wealth managers
still need to employ tax-efficient and
interest in boarding preparatory schools
and London day schools from most of our As an investor you should devote your
they can go about protecting their reputa-
tion. It is vital to conduct a reputation
their views on key findings long-term wealth management vehicles international clients. attention to things that a) matter, and b) management audit as soon as possible.

from the Attitudes Survey for UHNW millennials, they can also ex-
pect to implement values-based consider- William Petty, Director, Bonas
you can do something about. Geo-poli-
tical events, though of huge significance
This will focus on maintaining or taking
control of an individuals reputation. The
ations into investment portfolios. Service MacfaRlane Education in most ways, matter much less to the first area to look at is information that
providers supporting UHNWIs through returns of a long-term investor than inves- the individual, or friends and family, has
The results of The Wealth Report Attitudes Survey discussed
intergenerational wealth management tors think they do, while theyre thinking direct control over, such as social media
over the preceding pages provide a unique glimpse into the services (read here, family offices) can Luxury investment about them. And they are typically so accounts and personal websites. Its also
attitudes, concerns and investment choices of UHNWIs from expect family giving to evolve from a unpredictable that it is nearly impossible important that family and friends are
around the world. To look at some of the issues raised in more redistributive model towards managed In our experience UHNWIs are becom- to do much about them in the short term aware of the risks of posting information
detail, we asked leading specialists from various sectors of the and measured philanthropic initiatives. ing more and more concerned about with any certainty. So it is uncommonly online, as it could damage the individual.
paper assets such as bonds and equities, reassuring to observe from the Attitudes The more that can be done at the
wealth industry, including private banking, investment, family
Andrew Porter, Director of and are increasingly looking for tangible Survey results that clients instead seem proactive stage, the better.
offices, education and legal services, to share their own insights Research, Campden wealth alternatives. The scarcity of luxury assets to be rightly much more focused on
into specific trends and highlight what the implications could and their historic ability to hedge against the certain things they can actually Niri Shan, Head of Reputation
be for UHNWIs and their advisors. inflation make them an appealing invest- do something about, such as planning Management, Taylor Wessing
Global wealth distribution 16 17 the wealth rePort 2015

a comprehensive
analysis of how wealth
is distributed around
the world

Global
wealth trends
With the help of data from WealthInsight, 100,000 head of population, is some 01
The Wealth Report provides a unique and way behind countries in Scandinavia, Wealth rises
comprehensive analysis of how global New Zealand and the UK. Despite the the global population of uhnwis
wealth distribution is changing and is pre- sharp rise in the number of Chinese rose by almost 5,200, or 3%,
dicted to change over the next 10 years. UHNWIs, there are still only 0.6 UHNWIs in 2014, and 53 new billionaires
were created
Last year, around 15 people a day per 100,000 people in China because of
joined the ranks of the ultra-wealthy, or the size of the countrys population. 02
those worth over US$30m. This growth Wealth, or more specifically, its
future growth
is set to continue in the coming decade, uneven distribution, has become an over the next 10 years the
with the global population of ultra-high- increasing subject of debate over number of uhnwis around the
net-worth individuals forecast to climb by the past few years. Some, such as the world is forecast to rise by 34%
34% to a total of almost 231,000. controversial French economist to almost 231,000. Growth will
be strongest in developing regions,
Our data also allows us to look at Thomas Piketty, argue that governments
with africas ultra-wealthy
wealth distribution trends at a granular should take action and levy higher taxes population rising by 59%
country level. As such, we can highlight on the rich in order to re-distribute
specific wealth-creation hotspots, for wealth. Others, like our contributor Dr 03
example, Kazakhstan, where the number Pippa Malmgren, believe that higher regional shifts
of UHNWIs is set to grow by 114% over the taxes could actually prove a barrier to asian uhnwis now hold more
next decade. But topping the list of the economic growth, undermining the total wealth ($5.9tn) than those
almost 100 countries we examine is Viet- opportunity for wealth creation across in north america ($5.5tn)
nam, with a forecast uplift of 159% every stratum of society.
in its UHNWI population. In developing countries significant
Taking a different angle on the data, amounts of wealth are already being
we can see how evenly wealth is distrib- created by a growing and increasingly
uted within a country. While Monaco, aspirational middle class. On p23 we
unsurprisingly, perhaps, given that most examine the importance of this movem
of its residents are very wealthy, tops this ent across the world, not only as a gen-
list, with the equivalent of 574 UHNWIs erator of wealth but also in terms of the
per 100,000 people, the other countries increased political power it commands,
that emerge at the top are perhaps more and how this may be set to change the
surprising. The, US with 12.7 UHNWIs per geopolitical landscape.
Global wealth distribution 18 19 the wealth rePort 2015

uhnwI populations and total wealth by region in 2014

For full details of wealth distribution trends and forecasts for each
world region and for almost 100 countries turn to databank, p66

uhnwI population
growth continues europe russia/Cis
The Wealth Report highlights
key current and future global
60,565 2,068
wealth distribution trends Predicted uhnwi 10-yr growth 25% Predicted uhnwi 10-yr growth 25%

Grinne Gilmore, Head of UK total uhnwi wealth $6.4tn total uhnwi wealth $0.6tn
residential researcH

The global population of ultra-high-net- 2.9% in the previous 12 months. But at a uncertainty over the ramifications of
africa asia
worth individuals grew by almost 5,200 regional level the differences were more withdrawing fiscal stimulus measures
last year, according to data prepared marked. in the US affected sentiment in 1,932 42,272
exclusively for The Wealth Report by the Most notably, Asia overtook North many regions.
analyst firm WealthInsight. America as the region with the second- Towards the end of the year plunging Predicted uhnwi 10-yr growth 59% Predicted uhnwi 10-yr growth 48%

This latest increase means 65,335 largest UHNWI growth. Some 1,419 people oil prices and the strengthening dollar total uhnwi wealth $0.2tn total uhnwi wealth $5.9tn
people have joined the ranks of the moved past the $30m+ mark in Asia in also hit emerging markets, as well as key
ultra-wealthy over the past decade 2014, after an increase of fewer than 1,000 natural resource exporters like Nigeria,
a rise of 61%. In total, there are now in 2013. Europe held onto the top spot Russia and Mexico.
172,850 individuals in this cohort who with the most new entrants into the Ouliana Vlasova, Head of Content Middle east australasia
hold wealth totalling $20.8tn, an
increase of $700bn during 2014.
ultra-wealthy bracket over 2014.
The ultra-wealthy in Asia now also
at WealthInsight, says: The positive
outcomes for developed economies at the
7,269 3,920
Moving up the wealth brackets, nearly hold more in total wealth, with net assets start of 2014 positively influenced wealth Predicted uhnwi 10-yr growth 40% Predicted uhnwi 10-yr growth 23%
1,180 people became centa-millionaires in of $5.9tn, than those in North America, creation. However, that picture changed total uhnwi wealth $0.7tn total uhnwi wealth $0.4tn
2014, taking the worlds total population with $5.5tn. However, with a $6.4tn throughout the year. The growth in wealth
of those worth over $100m to 38,280. treasure chest, European UHNWIs still could perhaps have been bigger had the
At the top of the wealth tree 53 individ- control the most wealth. world economy picked up more strongly
uals became billionaires last year, pushing Last years rise in UHNWI numbers in the second half of last year.
global membership of this exclusive club came despite weaker-than-anticipated The outlook for the rest of this year is
to 1,844 an 82% rise from the number global economic growth. During 2014 the also mixed. Although the IMF has down-
recorded in 2004. IMF was forced to downgrade its forecast graded its own forecasts for annual growth
The annual pace of wealth creation also increase for world output from 3.7% in world output from 3.8% to 3.5%, this is
quickened in 2014 compared with 2013, to 3.3%. still slightly stronger than the growth in north america
albeit slightly. The number of UHNWIs
grew by 3.1% last year, compared with
Throughout the course of 2014, politi-
cal tensions mounted, while increased
2014. Emerging economies are expected
to grow by 4.3%, compared with 2.4% for
44,922
developed economies. Predicted uhnwi 10-yr growth 25%
total uhnwi wealth $5.5tn

latin america
Economic headwinds
9,902
countries with UHnWi population growth of 5% or above in 2014

There is certainly evidence that

Predicted uhnwi 10-yr growth 50%
Monaco 10% beneath the economic headwinds, some
total uhnwi wealth $1.2tn
Zambia 7%
central banks and governments have been
getting to grips with the serious repair
Mongolia 7% work needed in the wake of the global
namibia 6% financial crisis.
However, fears over economic weak-
Kazakhstan 6%
ness in the eurozone prompted the Euro-
China 6% pean Central Bank to start a programme
uruguay 6% of quantitative easing earlier this year, a
signal of the headwinds still facing devel-
iran 6%
oped economies.
Vietnam 5% Yet the longer-term forecast for wealth
uae 5% creation, anticipating how wealthy popu-

Panama 5%
lations will have changed a decade from 172,850 $20.8tn 34%
now, is still upbeat. Looking through the
hong Kong 5% shorter-term uncertainties, WealthInsight
nigeria 5%
predicts the number of ultra-wealthy
people will grow globally by 34% between Global uhnwi Global uhnwi Predicted global
uganda 5% 2014 and 2024, up from a forecast of population 2014 wealth 2014 uhnwi population
Myanmar 5% 28% growth between 2013 and 2023 (see growth 2014 to 2024
graphic for regional predictions).
Ms Vlasova says: We expect the
all data provided by measures that are being put into place to
Global wealth distribution 20 21 the wealth report 2015

Countries with highest forecast growth in UHNWI populations, 2014-2024

Breakdown of Monaco wealth

tiers (2014)

safeguard against another financial crisis millionaires (those with over $100m in
will contribute to improved economic net assets) in the principality jumped by Forecast top 11,924
conditions over the next decade, coupled 10% in 2014, far above the European aver- FIVE UHNWI
with government initiatives to create In terms of age of 3.2%, while the number of billion- populations
more entrepreneurs one of the main sheer numbers, aires rose from 11 to 12 (see chart on p21). in 2024
drivers of millionaire growth. the US will It is likely that the tax-free environ-
Asia is set to lead the way, with another still be the ment and low entry hurdles for residency
217 22
20,127 people likely to see their wealth dominant force in Monaco have become a greater draw
move past $30m during the next decade. for those concerned by discussions of
in terms of its 12
Looking in more detail at our data, increased taxes on wealth and assets. US
ultra-wealthy
which includes a comprehensive analysis Indeed, our Attitudes Survey (p10) high-
of wealth distribution for over 100 population in lights that one of the biggest concerns for 50,767 Millionaires
countries, we see a number of other 2024 UHNWIs across the globe is a potential
UHNWIs
Centa-millionaires
key trends emerge. increase in wealth taxes. Billionaires
Despite the turbulence in some cor- In terms of sheer numbers, the US
ners of the global economy as a result will still be the dominant force in terms
of renewed political tensions and fiscal of its ultra-wealthy population in 2024, Number of UHNWIs per
Japan
uncertainty in 2014, some countries expe- with the data forecasting a 25% increase 100,000 people
rienced particularly strong wealth crea- in UHNWI numbers to almost 51,000, 19,916
tion last year, with UHNWI populations the biggest concentration in any single
Monaco
expanding by 5% or more in 15 countries country (see chart on the right). 574
(see chart on p18).
Twelve of these countries were emerg- Luxembourg
ing economies, underlining the fact that Wealth equality 113
despite concerns about the easing of the China
Singapore
pace of growth in developing economies,
they are still key drivers of wealth crea-
But when looking at these wealthy
residents as a proportion of the countrys 15,681 60

tion. total population, the US, with 12 UHNWIs Switzerland

But it is also notable that it was per 100,000, is outgunned by 19 countries 54

Monaco, the well-established hub for including New Zealand and the UK (see Norway
wealth, that topped the list for growth last chart on p21). Unsurprisingly, Monaco 50
year, with a 10% expansion in its popula- tops the list with an equivalent rate of
Germany
tion of UHNWIs. The number of centa- 574 per 100,000. New Zealand

14,481 24

UK
17

Germany
14

UK Japan

13,176 13

US
13

Russia
While Monaco is set to double its to base themselves overseas. Almost one- 0.9
population of ultra-wealthy residents over third of Russian UHNWIs would like to
the next 10 years, it will not quite keep change their domicile, according to the
up with the rate of growth in some other Attitudes Survey.
economies, including Vietnam, the Ivory Indonesia, which is expected to see
Coast, Kazakhstan and Indonesia, which 132% growth in the number of ultra-
are forecast to see the largest increases in wealthy people by 2024, is the only MINT Bank, Africas largest bank, says: Africa
UHNWI populations over the next decade country where 10-year forecast growth has the highest potential for growth of any
(see chart above). exceeds 100%. Jim ONeill, former Chair- region at the moment. Reforms in Nigeria
We identified Kazakhstan last year as a man of Goldman Sachs, popularised the have been expedited, helping the country
country to watch, and this is still the case. acronym MINT for Mexico, Indonesia, build credibility among foreign investors.
It is set for a 114% increase in UHNWIs Nigeria and Turkey, identifying them It is an exciting time.
over the next 10 years, much higher than as the new engines of economic growth. When we look at the amalgamated
the 46% growth forecast for neighbouring Nigeria comes close to Indonesia with expectations for growth in UHNWIs, the
Russia. Indeed, most of the CIS countries 90% forecast growth in UHNWIs. It is MINT countries, with average expected
are set to outperform Russia in terms of striking, however, that even this level uplift of 76% over the next decade, nar-
UHNWI growth not only because of of growth is not enough to clinch the top rowly defeat the BRIC countries (Brazil,
MIDAS TOUCH Monacos
the military and fiscal turbulence in the spot for Africa, which is taken by the Ivory Russia, India and China), which have an
population of UHNWIs is country, but also because of the trend in Coast (+119%). Deon de Klerk, Head of average forecast growth of 72%. How-
set to double by 2024 Russia for those who have amassed wealth International Private Clients at Standard ever, they both far outstrip global average
Global wealth distribution 22 23 tHE WEAltH REPORt 2015

PURCHASING POWER Middle-class

spending is driving wealth creation

forecast growth (34%) and the average Brazillian economy. There is still much
increase expected across the G8 (28%) work to be done, including offsetting the WEALTH TAXES:
over the next decade. falling prices for key Brazilian exports. THE GREAT DEBATE
In China, policymakers are under However, despite this, the growth of investment power in developing econo-
the debate about income inequality (see
increasing pressure with questions over Brazils UHNWI population over the next graphic below) and wealth taxes gained mies has a direct impact on the poten-
economic growth mounting as well decade is expected to outperform the traction during 2014, not least because tial for the creation of entrepreneurial
as political tensions surfacing in Hong global average, at 50%. of the wide discussions around the ideas UHNWIs who can benefit from the rising
Kong. However, Gabriel Sterne, Head of of thomas Piketty, a French economist appetite for everything from consumer
who argues that there should be a global
Global Macro Investor Services at Oxford goods to financial services, technology
wealth tax on the richest in order to redis-
Economics, says there is room for more Eurozone difficulties tribute money to the poorest in society. the and health care.
education and financial deepening in the well-respected oeCd has also highlighted This has been well proved by the
country. We still see China as a success The difficulties in the eurozone over the that inequality can curb economic growth, stratospheric success of Alibaba, which
story, and it should continue to catch up last year, with Germany narrowly avoid- arguing that using tax and transfers to provides sales services for websites and
in terms of productivity, he says. Cer- ing another recession, are not over yet. tackle inequality can be effective as long has propelled its founder, Jack Ma, to the
as the policies are highly targeted, aimed
tainly by 2024 China is not only set to be The economic grouping faces a potential- at not just the very poorest but the poorest top of Chinas rich list. Alibabas success
the largest economy in the world, but ly painful re-balancing of the economy, 40% of the population, particularly focus- has been the result of, in no small part,
will boast nearly 15,700 UHNWIs and driving productivity as well as consump- ing on education. increased consumer demand and access
338 billionaires. tion in the coming years. This is re- Yet other economists point out it has to technology across China.
Meanwhile, elections in India and Bra- flected in our data, with many eurozone been proved that high marginal tax rates In Africa, Acacia Mall, a new high-end
can decrease productivity and inhibit
zil have sparked opportunities for more countries seeing a slightly lower level of entrepreneurialism, as those who suc-
shopping mall in Kampala, Uganda, is just
economic growth. India has seen a 166% growth in ultra-wealthy populations than ceed are faced with the prospect of much one example of how the middle classes are
rise in UHNWIs over the past decade, and the global average. However, the newest higher levies. dr Pippa Malmgren, founder shaping retail, with Western-style shop-
with the new Indian government com- entrants to the eurozone Latvia, Lithua- of drPM Group and former economic ad- ping centres now providing good returns
manding a majority in the lower house nia and Estonia are set to outperform in visor to us President George w. bush, for their HNWI backers. Judy Rugasira Ky-
argues that instead of focusing on taxing
for the first time in three decades, there the next decade, albeit from a low base. anda, Managing Director at Knight Frank
wealth brackets, there should be more
is real opportunity to introduce far more The UK, which had the fastest-growing emphasis on creating more wealth for all. Uganda, says: The mall is surrounded by
transparency. That in turn will boost for- economy in the G8 last year, is set to see in her book Signals, published earlier this areas populated by a strong middle class,
eign investment. WealthInsight forecasts 100 billionaires by 2024, making it the year, she argues that instead of increasing who benefit from the retail and services
tax levies, governments should be cutting
the power of
a 104% increase in Indias UHNWIs over fifth-highest hub for billionaires in the expanding rapidly in emerging econo- provided in an upmarket setting.
them, especially for entrepreneurs and
the next decade. world behind the US, China, India and mies in recent years. By Milanovic and Inditex, the Spanish retailer whose
small businesses: the argument seems to
Last years election in Brazil, and the
ensuing interest rate rise by the countrys
Russia, each of whose overall population
significantly outnumbers that of the UK.
have swung to distribution, when in fact it
should be about productivity. it is essential
mass affluence Yitzhakis measure, there are more than
369 million middle-class people in G20
brands include Zara, Uterqe and Mas-
simo Dutti, and which is majority owned
central bank, flexing its independent For more wealth distribution numbers that the policymakers focus on innovating Special focus on the importance of developing economies, such as China, by its founder, the Spanish billionaire
muscles, could start to shore up the see Databank, p66. and growing their economies. middle-class wealth growth Brazil and India, and around one billion Amancio Ortega, has been expanding
in advanced economies. rapidly in China. It has been opening five
Grinne Gilmore, Head of UK
Between 2000 and 2010, Africas Zara stores a month to satisfy the demand
residential researcH
middle-class population grew from 29% for its chic-yet-affordable fashion among
Millionaires. UHNWIs. Centa-mil- to 34% of the continents total popula- the middle class.
lionaires. Billionaires. Their lives and tion, while the OECD says that by 2030 A growing and strengthening middle
Global pyramid of wealth 2014
lifestyles cause fascination worldwide, but Asia will account for 66% of the worlds class can often be accompanied by politi-
the changes happening below the apex of middle-class population 10 times larger cal challenges, however, as the growth in
the wealth pyramid, while less glamorous, than that of the US and five times bigger economic independence sparks greater
are just as important to anybody inter- than Europes. demand for better services especially
billionaires
ested in the luxury sector. As well as indicating rising living education, political transparency and
1,844
Mass affluence, or the creation of standards in a country, the middle classes freedom of expression. In the past two
middle-class consumers with disposable are also the engine of consumer spend- years alone there have been protests in
Centa-millionaires income to spend, is inextricably linked ing, with enough disposable income to countries including Brazil, Hong Kong,
38,280 with economic growth and development, purchase goods and services that can help Venezuela, Bulgaria, China and Turkey,
and wealth creation. pump money back into domestic and which have, to some extent, been associ-
However, unlike the clearly delineated international economies. ated with the increasingly vociferous
uhnwis strata of the super-wealthy discussed ear- The trend is particularly striking in demands of the middle classes.
172,850 lier, there is no hard-and-fast definition the emerging economies, where private Yet the increasing demands of the
of middle class. Some researchers have consumption is growing at around three middle classes can also prove a great spur
included those who earn close to or above times the rate of advanced economies. to innovation, encouraging entrepreneurs
Millionaires
the countrys average wage, while others The developing worlds share of global to start their own businesses to provide
17,808,831 have set specific income thresholds. For private consumption climbed from 18% for this emerging class with disposable
example, influential economists Branko to nearly 30% between 2002 and 2012, ac- income, which in turn provides good jobs
total population Milanovic and Shlomo Yitzhaki declared cording to In Search of the Global Middle to lift more people into the middle classes
7,290,912,784* in 2000 that the global middle class were Class, written by Uri Dadush and Shimelse resulting in a form of virtuous circle.
those who earned between $4,000 and Ali. It is certainly no coincidence that the This ability of the middle class to grow
$17,000 a year. wealth data prepared for this report shows itself is perhaps just as well, as amid a
More recently, the idea of looking at that some of the fastest rates of growth cloudier outlook for the global economy,
the purchase and use of cars as a measure in the number of millionaires will be in the eyes of the world are turning to the
of disposable income and middle-class Africa and Latin America over the next middle classes and more importantly
status has gained currency. decade, with an expected increase of 53% their wallets and purses. Their spending
olYMPian endeaVours uhnwi population growth in brazilian *as of 15:48 GMt 27 January 2015 Whatever the definition, there is no and 46%, respectively. power will be a crucial lever to help boost
cities like so Paulo is set to outperform the global average source: wealthinsight, worldometers.info doubt that the middle classes have been Increased middle-class spending and global demand.
Global wealth distribution 24 25 the wealth rePort 2015

The Wealth Report asks

what the biggest risks and
opportunities for wealth
creation around the world are

different stages of develop-

technology
Volatile ment. The ideal is that each of
outlook these countries stays on track JoHn Veale
towards economic develop- Chief investment ofcer growth in HNWI numbers over
ment and growth. But if any at stonehage investment Partners,
recent years. Given that Africa
JoHn Veale of them, especially one of the a global multifamily ofce
currently accounts for 15% of
Chief investment ofcer at major nations such as Nigeria, the worlds population, but de-
stonehage investment Kenya, South Africa or Angola, livers only 4% of global output,
Identifying specific growth op-
Partners, a global
multifamily ofce
took a sudden change of direc- property and portunities is made more dif- it unquestionably offers great
tion, then that would pose a
risk to Africas growth story.
investments of ficult by the uncertain outlook, opportunity over the medium
and longer term.
Geopolitical events such as
passion and it is equally difficult to be
sure which assets will be low
the escalation of Russias ac- risk in the future traditional
tions in Ukraine could lead to cHris Williamson havens cannot be guaranteed
narrow further loss of confidence and Chief economist at Markit, a global to remain low risk, and this
economic growth potentially a deflationary trap, nancial information includes blue-chip companies
particularly in Europe. At the services provider and government debt. But in
other extreme, if economic this environment, excessive
dr sHUBHada rao growth is stronger than antici- caution can be misplaced,
senior President and pated and central banks are After a period such as the
and even wealth preservation
Chief economist at Yes bank, wrong-footed by wage pres- financial crisis, with the great
one of indias largest private-
requires a degree of risk. Tak-
sures on inflation, this could correction that happened
ing a 10-year view, advances
sector banks
pricing of lead to tightening of policy Government in its wake, there are always find the missing in technology should continue technology
opportunities to find assets
equities and strong rises in yields. As expansion that might still be under-
middle of to empowerthe spread of and real estate
The risk for wealth creation in investment advisors we worry
the Indian economy and many more about these issues today, valued, whether property in manufacturing education and prosperity, and
in turn fuel consumer demand.
other emerging economies cHris Williamson as loose monetary policies cUrt ricHardson the US or Spain. Even seven cUrt ricHardson
Only a major conflict is likely
will arise if economic growth Chief economist at Markit, a global have helped push the valua- uhnwi us tech years after the crisis, there are uhnwi us tech entrepreneur and
dr sHUBHada rao to stand in the way of this.
over the coming years is not nancial information tion of many asset markets to entrepreneur and founder still opportunities available. founder of otterbox
senior President and
spread across every sector of
services provider levels that allow little room of otterbox Alongside this, it is no sur- Chief economist at Yes bank,
the economy, from services for disappointment. prise to me that investments one of indias largest
of passion have performed so private- sector banks
There will be growing oppor-
to energy. Such broad-based I see the biggest risk at present One key risk, certainly in the tunities in emerging-market
growth results in a quicker well of late. If you can only get
being the disconnect between US but also elsewhere around technology that is, new,
trickle-down effect than when a low rate of return, you might
the pricing of bonds and com- the world, is the continued ex- The opportunities for wealth more-sophisticated develop-
the economy is relying on just as well invest in something
modities on the one hand, and pansion of government. There creation, especially in India, ments within the technology
a few strong pockets of output. you enjoy. My vote is for clas-
equities on the other. While has been exponential growth are potentially huge, if policy- we all use every day. Funding
Every economy that trans- sic motorcycles.
bond and commodity prices in the size of the government makers can boost manufactur- platforms such as Kickstarter
forms itself from an emerging are pricing in weak global de- in the US over the past eight ing, or, as I call it, the missing are exciting, helping engender
to a developed economy has mand, recent stock market ral- to 12 years, and this has been middle. There are signs of a more new ideas. We also
seen some instances where
wealth inequality has growth,
lies seem to be factoring in the marked by more taxes and stronger and more transparent africas young see real estate, mostly com-
expectation of future profits regulation. These develop- policy system under the new mercial property, in the US
but this seems to be most based on rising demand. This ments have an impact on the Modi government, and, if suc-
population as an opportunity there is a
acute where the economy is year will certainly be a year to sustained dollars people have to invest. cessful, this will attract more reassurance that you can actu-
leaning on just one or two watch how the markets react political upheaval When there is uncertainty overseas investment. India has deon de KlerK ally go kick your investment.
levers of growth. to the withdrawal of monetary about whether a tax regime the ability and the know-how People should not overlook
head of international Private
stimulus in the US, as there will continue to change, or to increase its global presence Clients at standard bank, the opportunities in developed
deon de KlerK
is a strong argument that the about expanding regulation, in terms of manufacturing, the largest bank in africa economies. For many years the
stock rally has been fuelled by head of international Private investment decisions change,
Clients at standard bank,
and it could benefit from the story has been about emerging
excess credit in developed and the largest bank in africa
which in turn can have an global links created by over- economies, based on their
emerging markets, fuelled by effect on economic as well as seas investment. If allowed Africa is one of the few re- manufacturing. But we have
quantitative easing. investment outcomes. The to flourish, a manufacturing gions remaining in the world moved some of our manu-
Instability is a risk to any USs approach to this is, in sector in India could provide where there is huge potential facturing back to the US and
form of economic growth. effect, a global issue, as its massive growth. Education is for growth. It has a growing Canada in recent years there
This is particularly true in economic performance has also more widespread than in and young population that is is opportunity here.
Africa. A major sustained international ramifications. other emerging economies. fuelling demand and push-
political upheaval or a similar ing up economic activity and
incident could detract from wealth creation. The con-
the important projects being tinent also boasts a strong
implemented that should de- strand of entrepreneurialism,
risks liver growth. There are many opportunities which has resulted in a clear
countries within Africa, all at shift towards substantial
Global cities 26 27 the wealth report 2015

The cities that matter to

the worlds wealthy for
business and lifestyle

Global Cities
Survey
What makes a city important to the for business and leisure. 01
wealthy, and what makes them want to Follow the money was the sage London calling
live there? Researchers attempt to solve advice from the Watergate mole, and The UKs capital is now the
this conundrum by measuring and it holds true at the top of our rankings. worlds most important city, but
ranking quality of life and a host of London and New York, the worlds that distinction could belong to
New York by 2025
other indicators. dominant financial centres, take the
Of course, if we measure a citys first two positions in our latest rankings. 02
importance by political power, Washington Although the total wealth held by
Power shift
DC and Beijing will be at the top of the tree, UHNWIs is now greater in Asia than in Despite not being able to grab
followed closely by Brussels, the power North America, no single city can claim the top spots from London and
base of the EU. If we assess quality of life, to be the regions economic hub and New York, the number of UHNWI
a clutch of northern European, Canadian really challenge the dominance of residents in Singapore and Hong
Kong is set to increase more
and Australian cities, led by the likes of London and New York.
rapidly over the next 10 years.
Melbourne and Toronto, will dominate. Within the Asia-Pacific region, Hong Seven of the top 10 risers are
But, by and large, these cities do Kong is now the most important city in Asia
not boast the highest concentrations of largely because of its close economic
UHNWI residents. You may need to lobby affinity with China, although Singapore 03
in Washington or Brussels, but you are has the biggest UHNWI population. Asian battle
less likely to want to live there. Some of the most interesting results Hong Kong overtakes Singapore
Our focus, as highlighted so graphical- are not found at the top of city ranking as the key city for UHNWIs in
Asia. It will retain this position
ly on pp30-31, is to consider the number tables new candidates rarely emerge
in 2025
of UHNWIs who actually choose to live and up-and-coming locations offer some
in each city. of the most interesting opportunities for
To provide a more rounded picture entrepreneurial UHNWIs or those looking
we have also assessed responses from to join the ranks of the super-rich.
our Attitudes Survey, in which we asked On p32 and p33 we highlight four
wealth advisors around the world to name cities around the world that could
the cities where their clients spend time be worth a closer look.
Global cities 28 29 the wealth report 2015

Top three cities with the greatest growth in the number

Top 40 most important
cities to UHNWIs in 2015 of UHNWI residents (2014-2024)

1 London 1 2 3

2 New York biggest global total, with over 520,000 Singapore Hong Kong New York
HNWIs, and Tokyo slipping to second
3 Hong Kong place with 508,000.
4 Singapore By this point Beijing will sit in third
position, with 350,000 dollar millionaires,
5 Shanghai a rise of 55% over the decade. Despite the
6 Miami
US and Japan hanging on with the two
biggest city counts, growth even at this
7 Paris wealth level will be dominated by Asian
centres, with six of the 10 biggest growth
8 Dubai
cities in absolute terms being in Asia.
9 Beijing Collectively they are expected to add
600,000 new HNWIs to their populations
10 Zurich
over the period to 2024. In Mumbai
11 Tokyo alone forecast growth is a phenomenal

12 Toronto
125,000 a 128%.
Our Attitudes Survey points to the
+1,752 +1,251 +1,013
13 Geneva cities that UHNWIs believe will yield the
best investment opportunities in 2015
14 Sydney led by New York, London, Berlin and Source: WealthInsight See pp3031 for more city-level UHNWI population data

15 Taipei
Los Angeles.
PRIME MOVER London is the worlds most important city for UHNWIs
Looking to the future, one constant
16 Frankfurt remains: the rise of the Asian powerhouse
cities, the relative decline of the Euro- How we measure the world
17 Moscow
pean centres and the tussle between the
The worlds top 18 Madrid two global behemoths New York and
Our analysis confirms the most important global cities to the worlds wealthy.
Our measure includes an assessment of unique city-level UHNWI population

40 cities 19 San Fransisco

London, with New York expected to be the
most important city for global UHNWIs
counts, provided by WealthInsight; in addition, our Attitudes Survey con-
tributes rankings covering the importance of cities for their business links,
in 2025. economic activity and lifestyle offer. In short, these are the cities where the
The latest results from our Global Cities 20 Vienna
wealthy congregate, work, invest, are educated and spend their leisure time.
Survey, which monitors the cities that 21 Milan Future forecasts for wealth populations and judgements of the changing
matter to the worlds wealthy influence of cities from our Attitudes Survey underpin our forecast for the top
22 Los Angeles 10 cities in 2025.
LIAM BAILEY, Global Head
of Research Most important cities to UHNWIs in 2025
23 Jakarta

24 Munich
Changing fortunes across our rankings Australasia and even the Middle East,
over the past 12 months have seen Hong with one standout reason the dramatic 25 Amsterdam 1
Kong and Singapore continue to slug it growth of wealth in Asia. On average, New York
26 Mumbai
out for pole position in Asia. cities across that region will see a 91% 2
This year Hong Kong edges ahead, growth in their UHNWI populations over 27 Dublin London
moving from fourth to third position in the next decade.
our global top 10. With Shanghai main- The most rapid growth in wealth will 28 Johannesburg 3
taining its steady rise, Asia holds four be seen in the likes of Ho Chi Minh City, 29 Istanbul Hong Kong
of the top 10 slots in our list. Although Jakarta, Mumbai and Delhi. One-fifth of 4
Geneva loses ground this year, Zurichs the cities assessed are expected to see 30 Kuala Lumpur
Singapore
strengthening helps maintain European greater than 100% growth over the next 31 So Paulo
representation. decade, all of which are in Asia or Africa. 5
Focusing purely on the population of Geographic concentration of wealth 32 Mexico City Shanghai
wealthy residents, our data confirms that remains a key facet with 10% of all 6
33 Berlin
London remains the single biggest centre additional growth in UHNWIs taking
Beijing
for global UHNWIs, followed by Tokyo, place in just five cities Singapore, 34 Washington DC
Singapore and New York. Ten years hence Hong Kong, New York, London and 7
35 Boston
and the expectation is that London will Mumbai over the next decade. Miami
retain its top spot, but Singapore will have When we focus on the broader measure 36 Cape Town 8
closed the gap with a 54% growth in its of dollar millionaires, or HNWIs, rather
population of UHNWIs over that period. than UHNWIs, we see some resilience in 37 Auckland Dubai

With the exception of London, the performance of cities in the developed 38 Buenos Aires 9
European cities will see a relative world. Tokyo contains the biggest single Paris
decline in their rankings based on the cluster of HNWIs today. At 466,000 the 39 Rio de Janeiro
10
size of their UHNWI populations over HNWI population is nearly a fifth larger 40 Tel Aviv Zurich
the next decade, despite an average than the number two city, New York, with
27% growth in wealthy residents. a little under 400,000.
Europes relative, if not absolute, In 10 years we will see a reversal, with Source: Knight Frank Global Cities Survey Source: Knight Frank Research ASIAN TIGER Singapore is set to gain the most UHNWIs
decline is reflected in North America, New York expected to be home to the of any city over the next 10 years
Global Cities 30 31 the wealth report 2015

Where UHNWIs
really live
Our Global Cities Survey touched on the locations with the highest
concentration of UHNWI residents; here we take a wider graphical
look at city-level populations around the world in 2014.

Source: WealthInsight
GLOBAL CITIES 32 33 the wealth report 2015

01

03

Addis Ababa, Ethiopia

Africas fastest-growing economy,

Ethiopia, benefits from not only the
political importance of Addis Ababa but
also the 3.8% annual growth rate of the
population within the capital. In addition
to natural growth, there is vast rural-
urban migration, which planners predict
combined could lead to the size of the
city surging by 2040 to over 8.1 million.
Wealth creation has seen a near
doubling of the population of HNWIs
since 2007 to a little over 1,300, with one
of the strongest forecast growth rates for
the coming decade with an expected
expansion to 2,600 by 2024.
Cities of the future The city is understandably witness-
ing severe growing pains, with public
The Wealth Report picks locations with
investment in transport including an
a potentially bright future
overhead rail network, and construction
dominating GDP growth. Relocation of
The cities featured on this spread are not existing residents to accommodate new Yangon, Myanmar overall economic output, Yangon is set
those about to be listed among the worlds infrastructure has caused severe stresses to be the lead beneficiary of this process.
top 10 or even top 20 most important on some sectors of the citys population. With its number of HNWI residents set Controls over non-resident property
cities. Indeed, none of them yet boasts 01 BELGRADE South-eastern The Renaissance dam under construc- to more than double over the coming ownership have slowed private interna-
any billionaire residents, according to Europes financial centre 02 tion on the Blue Nile is Africas largest decade, hitting in excess of 3,500 US tional investments, but private equity
data from WealthInsight, but their HNWI 02 PANAMA CITY A Singapore hydroelectric scheme and could provide dollar millionaires by 2024, Myanmars investment in business, especially those in
(millionaire) and UHNWI populations are for Central America energy security a vital component for former capital and largest city, Yangon, the construction and development sectors,
03 ADDIS ABABA Africas
rising, and they are locations whose influ- economic development. is a classic example of emerging market have been one method for non-residents
political capital
ence we believe is growing strongly at 04 YANGON Annual tourist visits With the presence of the African wealth creation. to gain exposure to rising property values.
a regional level. Even if they are unlikely to hit seven million by 2020 Union headquarters, and the headquar- Benefiting from the gradual opening up Restaurant, hotel and retail offer has
to be on the second-home list of most ters of the United Nations Economic of its economy, following the introduction been improving steadily over the past
UHNWIs, they should certainly be Commission for Africa, as well as a of democratic reforms in recent years, the five years, and new entrants are arriving
on their radars in terms of the wealth number of continental and international city has seen strong employment growth rapidly with tourism visits forecast to
creation opportunities they will present. organizations, the city is commonly and inward investment, with annual GDP grow from three million in 2015 to over
regarded as the political capital of Africa, growth at a national level predicted to seven million in 2020. A grand tour
lending a strong diplomatic and political eclipse that seen in India and even China of Myanmar is now on the hotlist for
Belgrade, Serbia young visitors in particular, who are stay- edge to its growing economic strengths. in 2015 and 2016. Accounting for a fifth of wealthy tourists.
ing in increasing numbers, attracted by
As with all our featured cities, rising low-cost and relatively high-quality office
wealth is a key illustration of the growing accommodation to develop internet and
04
strength of Belgrades economic fortunes. app start-ups, including leading online
While seeing only a steady 12% rise in gaming firms.
the number of HNWI residents in the
years from 2007 to 2014, the expectation The
is that this figure will jump markedly by Panama City Economists
2024, with a forecast of 72% growth over decision to label
the decade. The unique geography that has blessed Panama
Accounting for 40% of Serbias Panama with its canal has also aided a Singapore
economic activity, the city acts as south- economic growth and wealth creation in for Central
eastern Europes financial and business its capital, Panama City, by bridging the America seems
centre and is witnessing rising levels of divide between Latin and North America.
increasingly
foreign direct investment. With a near doubling in the number of
Inward investment has been aided by HNWIs since 2007 to hit 4,700 in 2014 of which have contributed to foreign direct
prescient
tax incentives and grants and an increas- and nearly 7,000 by 2024, The Economists investment levels hitting 9% of GDP in
ingly competitive tax environment, which decision to label the city a Singapore recent years.
has attracted the likes of Fiat and Siemens for Central America seems increasingly Tourism and retirement developments
to invest in plants in the city. prescient. In a Central American context have added to the attractions of the city.
Lifestyle improvements over the past Panama offers a high degree of economic High-quality transport and health care
decade have been supercharged by a grow- and regulatory stability. Investors are and a growing presence of global hotel
ing reputation as a tourist centre Lonely attracted by the strongest economic brands have drawn investment from
Planet describes Belgrade as one of the growth offered in the region and also a entrepreneurs looking to expand on
most happening cities in Europe luring very competitive tax environment all a strong food and lifestyle scene.
PIRI (PRIME INTERNATIONAL RESIDENTIAL INDEx) 34 35 THE WEALTH REPORT 2015

the performance of the

worlds most important
prime residential markets

the
PIrI 100
Virtually everybody likes to talk about Although isolated issues such as the 01
house prices, particularly the value of Swiss governments surprise decision Big apple bounce
their own home. But for ultra-wealthy to unpeg its currency from the euro in New York saw the biggest
individuals who may own houses around January house prices in effect became growth in prime residential
prices in 2014 (+18.8%). Three
the world, keeping track of their portfo- 20% more expensive overnight for foreign
other US locations were in the
lios worth is not that simple. buyers will clearly impact markets, we top 10 of PIRI
However, Knight Franks newly en- see two main opposing trends at play at
larged Prime International Residential the macro level. How they play out will 02
Index (PIRI) now includes performance have a profound impact on prime property Mixed fortunes
data for 100 of the worlds key luxury city markets. On one hand, the growing While 16 of the locations in our
and second-home markets, and is recog- globalisation of wealth means there are PIRI 100 saw double-digit prime
nised as the sectors most comprehensive more UHNWIs from more countries property price growth last year,
the value of luxury homes fell or
performance benchmark. looking for luxury homes in an increas-
remained static in almost 40%
So what does the PIRI 100 tell us about ingly diverse number of international of them
prime market performance in 2014 destinations; on the other, there is
which UHNWI property owners will be burgeoning government scrutiny of 03
rubbing their palms, and who will be less wealth and levels of protectionism. london calling
cheerful? Well, the picture is certainly The globalisation theme is highlighted The UK saw the largest influx
mixed around the world. by the rising number of UHNWIs who of HNWI passport seekers (over
Those lucky enough to have property are looking to shift their domicile; 114,000) over the past 10 years,
according to immigration
in the US are unlikely to have any com- with the help of immigration specialist specialist Fragomen
plaints, as domestic and international Fragomen we explore this trend in more
demand fuelled price growth. European detail on page 42. The growing usage of
destinations fared less well, with values private jets for business and personal
dropping on average by 0.4% across the purposes is another reflection of rising
continent. Overall, city markets around wealth mobility. Using exclusive data
the world outperformed second-home from NetJets we highlight the most
sun and ski destinations. popular and fastest-growing routes for
Of course, the analysis over the follow- the ultra-rich traveller.
ing pages is about more than just what And finally, Massimo Ferragamo, of
happened last year. While past perfor- the Italian fashion house Ferragamo,
mance is interesting, what the astute shares some of his own perspectives on
property owner will be more concerned luxury property ownership.
about is future trends.
PIRI (Prime international residential index) 36 37 the wealth report 2015

The PIRI 100

The latest results of our Prime International Residential Index, which marks the change in price of prime
residential property in 100 cities and second-home locations (annual percent growth to 31 December 2014*)

Rank Location World Region Annual % change 21 Melbourne Australasia 8.5%

22 Tokyo Asia 8.1%
1 New York North America 18.8%
23= Verbier Europe 8.0%
2 Aspen North America 16.0%
23= Munich Europe 8.0%
3= Bali Asia 15.0%
25= Vancouver North America 7.5%
3= Istanbul Middle East 15.0%
25= Frankfurt Europe 7.5%
5 Abu Dhabi Middle East 14.7%
27 So Paulo Latin America 7.3%
6 San Francisco North America 14.3%
28 Toronto North America 7.1%
7 Dublin Europe 13.4%
29 Riyadh Middle East 6.0%
8= Cape Town Africa 13.2%
30= Seoul Asia 5.3%
8= Muscat Middle East 13.2%
30= Doha Middle East 5.3%
10 Los Angeles North America 13.0%

Top 20
32= Madrid Europe 5.1%
11 Auckland Australasia 12.1%
US shines as global
32= London Europe 5.1%
12 Jakarta Asia 11.2%
32= Bangkok Asia 5.1%
13 Sydney Australasia 11.0%

growth falls
35= Mustique Caribbean 5.0%
14 Tel Aviv Middle East 10.3%
35= Ibiza Europe 5.0%
15 Bengaluru Asia 10.1%
37 Edinburgh Europe 4.2%
16 Amsterdam Europe 10.0%
Analysis of the latest trends to emerge 38 Courchevel 1550 Europe 3.2%
17 Miami North America 9.8%
39= Venice Europe 3.0%
from Knight Franks unique Prime 18 Berlin Europe 9.0%
39= Jumby Bay (Antigua) Caribbean 3.0%
19= Washington DC North America 8.7%
International Residential Index (PIRI) 39= Barcelona Europe 3.0%
19= Johannesburg Africa 8.7%
39= Val dIsre Europe 3.0%
Kate Everett-Allen, Head of 43 Mumbai Asia 2.9%
International Residential Research 44= Cayman Islands Caribbean 2.5%
44= Marrakesh Africa 2.5%
44= Gstaad Europe 2.5%
Annual price change by world region, to 31 December 2014
The value of luxury residential property 47= Bahamas Caribbean 2.0%
47= Morzine Europe 2.0%
around the world rose by just over 2% 47= Sotogrande Europe 2.0%
on average in 2014, based on the perfor- 47= Chamonix Europe 2.0%
mance of the 100 locations covered by our 47= Western Algarve Europe 2.0%
47= Cyprus Europe 2.0%
PIRI rankings. With reversals in markets
North America 53 Delhi Asia 1.8%
as far apart as Asia, the Middle East and
11.9%
54 Rome Europe 1.5%
Europe, growth was lower than the 2.8% Caribbean
55 Nairobi Africa 1.4%

0.4%
seen in 2013. 56 Hong Kong Asia 1.1%
57 Phuket Asia 0.7%
The US dominates the top of our table, 58 Guangzhou Asia 0.6%
taking four out of the top 10 positions, 59 Kuala Lumpur Asia 0.5%
Latin America
with New York (+18.8%) and Aspen (+16%) 60 Dubai Middle East 0.3%
in first and second place respectively. -3.9% 61=
61=
St Barts
Shanghai
Caribbean
Asia
0.0%
0.0%
The disparity with Europes cities is stark. 63= Central Algarve Europe -0.5%
Luxury prices rose by almost 13% on aver- 63= Beijing Asia -0.5%
65 Taipei Asia -1.2%
age across US cities last year, compared 66 Mribel Europe -1.5%
with an average of only 2.5% in Europe. 67= Megve Europe -2.0%
Rising high Prime property values in New York are soaring
Bali, the leading Asian second-home 67= Italian Riviera Europe -2.0%
market, and the emerging Middle Eastern 67= Monaco Europe -2.0%
Russia/CIS
67= Florence Europe -2.0%
urban powerhouse of Istanbul were stand-
out performers, with luxury prices up by Government Buenos Aires proved our weakest per- Europe
-3.7% 67=
67=
Geneva
St Moritz
Europe
Europe
-2.0%
-2.0%
15% year on year in both markets. policy has been former, but with GDP growth in negative -0.4% Asia
67=
74=
Cap Ferrat
Evian
Europe
Europe
-2.0%
-3.0%
Our previous front runner, Jakarta, territory in 2014, the citys housing market
which led the rankings in 2012 and 2013,
deliberately
aimed at tribulations are less than surprising. Africa
3.0% 74=
74=
Marbella
Mallorca
Europe
Europe
-3.0%
-3.0%
slipped to 12th place this year, an indica-
tion of the luxury market slowdown evi-
limiting price While the threat of Mayor de Blasios
so-called pied--terre tax doesnt appear
6.5% Australasia
74=
74=
Barbados
Provence
Caribbean
Europe
-3.0%
-3.0%

dent across many Asian cities last year.

rises through
higher taxation
to have dampened growth in New York, Middle East
10.5% 74=
74=
Lake Como
Vienna
Europe
Europe
-3.0%
-3.0%
Some previously strong markets such recent hikes in stamp duty (a purchase
9.3%
74= Brussels Europe -3.0%
as Dubai (17% growth in 2013) saw prices and mortgage tax) have curtailed the rate of price growth 74= Davos Europe -3.0%
83 Paris Europe -3.5%
slow markedly (0.3% in 2014). This is in market for properties worth over 2m in London, 84 Moscow Russia/CIS -3.7%
part because of the mortgage cap of the intervention holding overall prime price growth at 85= Cannes Europe -4.0%
Central Bank of the UAE, which is stricter 5.1% for the year. The latest changes to UK 85= Tuscany Europe -4.0%
87= St-Tropez Europe -5.0%
for those purchasing properties above five Stamp Duty mean higher costs for those 87= Lausanne Europe -5.0%
million dirham. purchasing a property priced at 937,500 87= Villars-sur-Ollon Europe -5.0%
The dampening impact of this kind of or above, this may cap growth above this *All price changes relate to local currency and reflect nominal change. 90 Courchevel 1850 Europe -5.4%
Data for Moscow, Los Angeles, San Francisco, Miami and Riyadh relates to 91 Dordogne Europe -6.0%
prudent macro policy also explains the threshold in the near term. the period from Q3 2013 to Q3 2014. Data for Tel Aviv relates to the period 92= British Virgin Islands Caribbean -7.0%
ongoing weak growth in Hong Kong and Despite the more muted performance from Nov 2013 to Nov 2014. Tokyo relates to properties above JPY 100m. 92= Umbria Europe -7.0%
Singapore. Government policy has been of the PIRI 100 this year, luxury housing Sources: All data from Knight Franks global network with the exception of:
94= Sardinia Europe -8.0%
94= Zurich Europe -8.0%
deliberately aimed at limiting price rises markets continue to outperform their Aspen Andrew Ernemann of Sothebys International Realty; Washington DC 96 Cortina Europe -10.0%
through higher taxation and mortgage mainstream counterparts. The average Metropolitan Regional Information Systems, Inc. Statistics generated on
97 Milan Europe -12.0%
06/01/2015, Copyright 2015. All rights reserved. Information deemed reliable
market intervention. price of a luxury home in our index is 38% but not guaranteed; Tokyo Ken Corporation; So Paulo FIPE (Fundao 98 Singapore Asia -12.4%
99= Crans-Montana Europe -15.0%
Mainland China mirrored this trend higher than it was at the indexs lowest Instituto de Pesquisas Econmicas); Los Angeles and San Francisco First
Republic Bank; Vancouver Dexter Associates Realty 99= Buenos Aires Latin America -15.0%
with prime price growth in Shanghai (0%), point in the second quarter of 2009; the av-
Beijing (-0.5%) and Guangzhou (0.6%) erage price of mainstream global property
proving lacklustre at best. has risen by just 14% over the same period.
PIRI (Prime international residential index) 38 39 the wealth report 2015

The square metres of luxury property US$1m will buy

Opposing forces Monaco 17

The tension between protectionism Hong Kong* 20

and globalisation in residential
markets is impacting market performance London 21

LIAM BAILEY, Global Head New York 34

of Research
Singapore 39

Since Knight Frank published the first But long-term trends, such as the growing Although rules surrounding the im- potential for demand growth from main- Geneva 39
edition of The Wealth Report in 2007, a appetite for international education, and migration process are tightening in some land China, but massive private wealth
Sydney* 41
relatively simple narrative undented by the pull of stable political, economic and locations, the general trend is for more has not yet diversified globally; rather its
even the global financial crisis has domi- regulatory safe havens, are responsible for countries, especially indebted European migration has been hampered by foreign- Shanghai 48
nated our analysis of global luxury resi- the most durable ongoing demand sources. ones, to try to attract new wealthy resi- exchange controls.
dential markets. Growing wealth creation The strength of Londons education dents. Although it can be a challenge for There has been a general acceptance Paris 50
has led to an increasing number of buyers, offer has long underpinned demand for countries to create high-value immigration that over time, restrictions on pension
Los Angeles 57
from an ever-widening list of countries, the citys property. A decade ago Russian, schemes and meet tough compliance investments and even direct investments
purchasing property in a growing number Middle Eastern or European children mov- safeguards, more will undoubtedly try. for Chinese citizens will be relaxed, and Miami 59
of global hubs. ing into London schools would be starting Perhaps the biggest trend that would more money will be invested overseas.
Beijing 61
With the arrival in 2014 of significant at age 13. Rising competition for places at contribute to our globalisation narrative We might want to question this
volumes of wealthy Chinese investors in 13 means a starting age of seven or eight is winning out against protectionism is the assumption for a moment. Since the Rome 68
markets around the world, it seems an increasingly the norm. lifting of capital controls in wealth-export- financial crisis the list of countries that
odd time to question the sustainability of London is not the sole education target. ing countries. Effective demand for luxury have imposed tougher controls on the free Moscow 79
this trend. There is, however, a risk in as- There is a growing desire for UHNWIs international property would be far higher flow of capital, even if only temporarily,
Istanbul 84
suming that the globalisation of demand to craft a global education experience than it currently is if it werent for red has grown longer India, Ghana, Cyprus,
is a one-way bet, as signs of protectionism school in the UK or Australia, university tape and bureaucratic limitations such as Ukraine, with more to come. There has Tokyo 86
are growing. in the US, postgraduate study or MBA in foreign exchange controls, as experienced been a shift away from the assumed direc-
Immigration, a classic driver for Europe creating global citizens in terms in India and China, for example. tion of travel of more-liberal trading Mumbai 96

international property investment by of language, location and education. And China is the most instructive, but conditions. So Paulo 142
UHNWIs, and a subject we look at in detail at every stage there will almost inevitably not unique, example to consider. The Even if China does liberalise, the huge
on p42, is an arena where we are seeing be a property requirement. simple fact is that there is extraordinary potential for Chinese investment flows to Dubai 145
rising counter-trends. influence asset prices globally highlights
Cape Town 204
In 2014 Russia, for example, imposed the tension between our globalisation and
reporting requirements on nationals seek- protectionism themes.
ing permanent residence or citizenship Five global prime ment was put into upgrading local infra- Rising demand from emerging-world
residential hotspots
in other countries, backed by criminal structure, such as developing parks, roads wealth has the potential to lead to a
sanctions. Some recipient countries have and a transport system. On the back of this, stronger political and regulatory backlash
restaurateurs such as Manos and Beluga
tightened access to residency, notably London in the main global investment hubs if
have improved the local lifestyle offer. Add
Switzerland, which has seen a range of in world-class sports facilities, access to asset prices and affordability issues rise
St John Street, Clerkenwell. This area has
restrictions on UHNWI immigration over the waterfront, the city centre and views strongly as a result.
led the loft-living trend for over 30 years.
recent years. We see the demand for loft accommodation of Table Mountain and this is the street to Source: See main PIRI table on page 37. *Based on apartments only
We have commented in previous edi- increasing. Scarcity will drive pricing, as watch in 2015.
tions of The Wealth Report on the adop- will Crossrail, with the nearby Farringdon Typical 700 sq ft apartment US$200,000
tion of new taxes or restrictions aimed station providing access to this key invest- There are, however, two potential
ment location. The Tech City association
specifically at non-resident purchasers, Dubai future approaches to release this tension.
will also drive the continued growth of PIRI price change by property
most notably in Singapore and Hong high-quality shopping and restaurants. type in 2014 Firstly there is a politically restrictive
Kong. Other countries are copying Business Bay, Dubai. Work has started approach, with more taxation and regula-
Typical 700 sq ft apartment US$1.3m
on building a channel connecting the sea
Rising
this model. tions aimed at non-resident investors. By
to the existing lake that lies in front of demand from
The UK will see the withdrawal of the asking for notification of second passports,
capital gains tax exemption for non- New York the Burj Khalifa. This will allow access emerging-world Russia has confirmed how restrictions can
for superyachts and sailing boats to the
residents in April this year, with the wealth has easily come from the wealth-exporting
West Street in Manhattan is one to watch. bay. Construction of large towers lining
introduction of higher annual charges the channel is under way, providing the potential nations. China could introduce a wealth
The street will form the new residential
for residential property held in corporate entrance to Brookfield Place, adjacent to residences with the unique benefit of to lead to a tax on outbound capital flows or even a
structures, traditionally favoured by the new World Trade Center complex, and mooring facilities in this central location. stronger worldwide tax regime.
wealthy overseas buyers. will be lined with world-class restaurants Typical 1,500 sq ft apartment US$680,000 political and Alternatively, it is just as likely that
In cities like New York and Paris new and luxury retail brands. West Street is a China will enter into greater cooperation
leader for the whole downtown market, regulatory
property taxes have been considered. which is set for a boost over the next few Hong Kong backlash on information exchange regarding
Despite these protectionist reactions, years; value growth here should outpace 4.5% in the main taxation and by which China, and others,
the overall direction of travel favours the rest of New York by some margin. Our tip for Hong Kong is the Sai Ying Pun will ultimately join in the wider policing of
neighbourhood. It is within close walking -0.9% -0.5% global
more, not less, international demand for Typical 1,500 sq ft apartment US$2.7m global wealth. This shift towards increased
prime residential property.
distance to central Hong Kong but retains investment global cooperation over taxation and
local charm. The area is near galleries, good hubs
There are a wide range of factors shops and excellent local restaurants. While transparency, and the sharing of investor
Cape Town
underpinning additional globalisation. more residential buildings have started to be details, would see a greater alignment of
Short-term geopolitical and fiscal factors Main Road, Green Point, Cape Town. The developed in the area, there are still many City costs and benefits between wealth-expor-
still dominate, the flight of capital from local area was initially boosted by the opportunities for redevelopment. Second home sun ting countries and the investment destina-
southern Europe during the eurozone legacy of the World Cup, and huge invest- Typical 700 sq ft apartment US$1.9m Second home ski tion countries which could ultimately
crisis in 2010 and 2011 is just one example. support long-term growth in investment.
PIRI (PRIME INTERNATIONAL RESIDENTIAL INDEx) 40 41 THE WEALTH REPORT 2015

This page:
HIGH FLIERS
DePartUre BOarD Private jet usage
by UHNWIs is
increasing
cHIna PoTenTIal
Opposite page:
Chinas current absence from our top SO NICE The Cte
10 relates to the embryonic nature of dAzur is one of
its private jet market. However, growth the most popular
potential in the near term is significant desitinations
jet manufacturer Bombardier fore- for private jet
casts that the Greater China private jet charters
fleet is likely to grow from 330 to 1,275

FlY aWaY aircraft by 2023.

NetJets, the first international op-
Using exclusive NetJets data, The Wealth Report erator to have secured a Chinese air
operating certificate to operate in
looks at the most popular private jet routes and
mainland China, believes that intra-
assesses their impact on wealth migration and China flights are likely to concentrate
property investment destinations initially on three major metropolitan
areas : Beijing, Shanghai and Hong Kong.
With its density of wealth and internal NetJets reports that the synergy
economic linkages, the US remains the between New York and London is greater
worlds most important private jet market than ever, with traffic on this major route snoWBelT and sUnBelT
by some distance, according to private avi- increasing every year. desTInaTIons
ation provider NetJets. This dominance While Dubai and the broader UAE are
In a relatively flat market both Olbia in
is borne out when we consider the globes seeing increasing traffic, the Middle Easts
Sardinia (+14%) and Ibiza (+17%) have
busiest private jet routes, where 60% of the position as the worlds third-largest market seen very strong annual increases in
traffic starts and ends in the US. is being challenged by the rise of traffic traffic over the past 12 months, confirm-
NetJets confirms that Europe is the in China and Brazil. Traffic from Brazil ing their growing importance as summer
second-largest market, at around 25% of to Europe has grown 20% each year since holiday and second-home hubs. Nice
the US. Russia continues to represent a 2010, with the main destinations inclu- remains a major destination, likewise
significant portion of overall European ding France, Spain, Portugal and the UK the airport of St-Tropez, where flying
demand. Moscow is among the top 10 reflected by luxury property investment into La Mle is now possible.
routes with highest hours flown, as re- purchases by Brazilian buyers during 2014. Growth in traffic to Alpine airports, such
as Sion and Chambry, points to a revival
corded by NetJets, reflecting the ongoing Africa is a more fragmented market,
in demand for property in nearby resorts
importance of Russian wealth in luxury although Nigeria has become a major like Verbier, St Moritz and Courchevel.
NetJets shines some light on the latest Private jet trafc: Private jet trafc:
property markets in Europe and the US. private jet hub with flights to and from Private jet traffic to destinations trends. There is a clear synergy between top 10 routes (2013) top 10 fastest-growing routes (2013)
Londons standout performance in Lagos making it into our list of the top 10 like the Maldives, the Caribbean established market routes and investment
Europe as an investment destination is fastest-growing global routes. and the Seychelles confirms the flows with London and New York dis-
confirmed by the fact that 30% of the most Anticipating wealth flows from one growing strength of property in long- playing one of the closest prime property Moscow Nice/Cte dAzur Nice/Cte dAzur New York*
frequented routes in this region either part of the world to another has become distance resorts. relationships as well as flight paths.
start or finish in the UKs capital city. an industry in itself. The insight of The most insightful data comes when
Miami New York* Maiqueta Miami
we look at emerging-market demand.
Latin American investment in Europe,
for example, has long been overshadowed New York* Los Angeles*** Dubai London
by the huge waves of investment flow-
FASTEST- ing into Miami and other US hotspots.
GROWING The breadth of routes flown into key EU New York* West Palm Beach Pittsburgh New York*
ROUTE markets from Brazil, but also Argentina
and other key southern American hubs,
reveals a closer relationship between London New York* Houston West Palm Beach
these markets than is often recognised.
The huge potential for demand for
property in Europe, and also in North London Moscow Moscow Tel Aviv

America, from investors based in Asia,

New York Africa, the Middle East and Latin America London Nice/Cte dAzur Houston Midland (Texas)
is hinted at by the new growth routes
highlighted by the NetJets data.
Chicago New York* Lagos London

WHo Is flYInG?
Houston New York* Austin Houston
Over 80% of private jet passengers are
male. The typical age for flyers is 40-55.
Private entrepreneurs dominate in terms West Palm Beach New York** Houston Washington DC
of profession. Source of wealth tends
to be from finance and the oil and gas
sectors. NetJets reports that flyers from *Teterboro, New Jersey *Teterboro, New Jersey
the property industry have returned in **Westchester/White Plains, New York
Nice/Cte dAzur the past 12 months, joined by owners of ***Van Nuys
technology companies.
Source: NetJets/Eurocontrol/SAS
PIRI (Prime international residential index) 42 43 the wealth report 2015

Passports, please
HNWI migration is a major influence on the global
luxury property market. Using research provided by
global immigration specialist Fragomen, we examine
the directions of travel

Anyone watching Londons stellar the Asia-Pacific region (India, China, received over 200 applications by August
residential market performance will be Indonesia), as well as the UK, Europe 2014, with applicants from 30 countries,
unsurprised to hear that the UK has been and South Africa. As of January 2015 but mostly from Russia.
a top recipient of mobile HNWIs over the the Hong Kong CIES programme, which Official figures show over 1,936 visas
past decade. was especially popular with HNWIs from were issued in the first 12 months of
According to Nadine Goldfoot, a part- China, has been suspended, leaving Portugals Golden Visa programme. Here
ner at Fragomen, over 60% of these have clients from the region in need of sus- the vast majority of applicants have been
been from Europe, but with substantial tainable alternatives. from China, representing close to 80% of
numbers also coming from China, Russia,
India, the Middle East (especially Saudi
Restrictions on confidentiality rules in
Switzerland have removed some options
total demand.
The biggest story in terms of wealth-ex- Future prime
Arabia, Syria and Turkey) and Africa (led
by South Africa, Nigeria and Egypt). More
for the mobile wealthy, and Fragomen
notes a number of HNWIs who had been
porting nations is undoubtedly China. It is
estimated that 76,200 Chinese millionaires
property trends
recently, 309 of the 703 applications in the domiciled in Switzerland for tax emigrated or acquired alternative citizen- The main factors that are likely to drive
first nine months of 2014 for the UKs Tier purposes have relocated to Singapore, ship over the 10 years to 2013. They are a prime residential markets over the short
1 investor visa were from China, with 162 the UK or the UAE. significant force in Europe and dominate and long term
coming from Russia. There has been growing specula- Asia-Pacific schemes with around 90% of
LIAM BAILEY, Global Head
Singapore has seen strong migration of tion over the success of the more recent applicants for Australias Significant Inves- of Research
HNWIs from China, India and Indonesia. entrants to the investor immigration tor visa coming from China.
Flows into the US predominantly come market most of them in Europe. Indias wealthy migrants tend to favour
from the UK, India and Russia, although Fragomen has noticed a sizeable uptake the UK, the US and Australia. French and Demand will increasingly be driven by
Fragomens worldwide client practice notes in programmes linked to property Italian HNWIs prefer the UK and Swit- international developers
that the US EB-5 programme saw record purchases in Europe across Spain, zerland. Some 73,000 Russians received
Gold Standard Australias east coast is attracting a new wave of Asian residential investors
applicant numbers from China in 2014. Portugal and Latvia. foreign passports in 2013/14, the majority The worlds largest residential developers,
Demand for entry to Australia has been Maltas Individual Investor Progr- of the HNWIs among them focusing on led by players from China, India, Hong
boosted by strong inflows from across a-mme introduced in February 2014 had the UK and the US. Kong and Malaysia, continue to diver-
sify into new markets. Where Greenland Government stimulus will be with us Reducing the London to New York travel
Group, Swire, China Vanke Co and Lodha for longer time from seven hours to three and a half
Group lead, they are followed by private is the first ambitious objective.
Countries with the biggest inflows of HNWIs (past 10 years) compatriot investors looking to dip their That ultra-low interest rates and govern-
toe into international investment with ment stimulus measures have aided de-
Country HNWIs 2013 HNWIs gained from 2003 to 2013 (as a percentage of total HNWI population) the reassurance of buying from a familiar mand for residential property, as with just New buyers will help boost demand
brand. Watch for Hong Kong buyers in Mi- about every other tangible asset, is a given. in established and emerging prime
UK 815,000 114,100 (14%)
ami, and Chinese buyers on the Australian A year ago the assumption was that it was markets
Singapore 225,000 45,000 (20%) Gold Coast and the US West Coast and only a matter of time before interest rates
just about every nationality in London would begin to rise across the developed Mexico, Indonesia, Nigeria and Turkey
US 4,034,000 42,400 (1%) and New York. world. A year on and the continued fragi- will be among the biggest suppliers of
lity of the eurozone recovery and broader UHNWIs hungry to buy luxury inter-
Australia 158,300 22,200 (14%)
national property. Although Mexican
concerns over the global economy have
Hong Kong 164,500 19,700 (12%) Some buyers will find the market less meant that policy tightening has been nationals tend to move into the US, they
welcoming pushed further into 2015 and even into are positive about European opportuni-
Canada 272,900 13,600 (5%) 2016. It appears that the support for global ties, with some notable investments made
Pressure from any number of bodies the demand and the ability of purchasers to in Spain and Germany in 2014. Turkey is a
UAE 48,300 10,100 (21%)
EU, the US and the OECD included on push prices higher will be with us for some growth market, although because of ongo-
Countries with the biggest outflows of HNWIs (past 10 years) low tax jurisdictions to comply with trans- while yet. ing problems around banking licences,
parency rulings is acting in concert with real demand has been held below
Country HNWIs 2013 HNWIs lost from 2003 to 2013 (as a percentage of total HNWI population) ever-tighter regulations aimed at reducing potential levels. Indonesian buyers will
the risk of money laundering. Similarly, Technology will reinforce the globali- become
China 507,800 76,200 (15%) while EU and US restrictions on Russia sation of demand a much more serious force in Australia
over the Ukraine crisis may have been and the wider Asia-Pacific region in 2015.
India 160,600 43,400 (27%)
tightly drawn in terms of named individu- In last years edition of The Wealth Report While Nigerian buyers will still form a
France 244,100 31,700 (13%) als with whom to avoid doing business, the we discussed the potential impact of sub- strong sector of the market in key cities
somewhat vague wording in the regula- orbital travel on property demand over like London and New York, they will
Italy 124,000 18,600 (15%)
tions has caused professional advisors to the next 10 to 20 years. More immediate increase their activity closer to home in
Russia 82,300 14,000 (17%) become increasingly risk-averse in terms support for global demand is likely to South Africa and Mauritius.
of whom they work with. Banks in par- come from improvements to traditional
Switzerland 265,800 10,600 (4%) ticular will simply not risk falling short of jet technology. Several companies such as
regulatory standards. There are a small but Aerion, Spike Aerospace, Lockheed Mar-
Indonesia 37,000 10,000 (27%)
growing number of potential buyers who tin and Boeing are working to reintroduce
will find it increasingly difficult to access a more affordable and sustainable
Source: Fragomen using data from New World Wealth survey foreign property markets. supersonic replacement for Concorde.
PIRI (PRIME INTERNATIONAL RESIDENTIAL INDEX) 44 45 THE WEALTH REPORT 2015

Personal perspectives
on property

The Wealth Report Editor Andrew Shirley

talks to MASSIMO FERRAGAMO about
homes, property investments and an
unusual collection

Massimo Ferragamos life seems to divide country house in Millbrook, a small vil-
MASSIMO LABOUR OF LOVE
neatly in two. Not only does he split his lage in upstate New York referred to as a
FERRAGAMO Castiglion del Bosco in
time between Italy and the US I was low-key version of the Hamptons. Tuscanys Val dOrcia
sent there to work for the Ferragamo busi- I love the contrast between the city
As a scion of one of Italys, if ness when I was 25 but in each country and the countryside, he explains. They
not the worlds, most influential he likes to move between homes in the are quite different, and I really like that.
and successful fashion dynasties, city and the countryside. But, I ask, if you had to make a choice? If He asks me if Ive ever been to the Val
Massimo Ferragamo has style in
his DNA. The sixth and youngest
In Italy he owns a house in Florence I was forced to choose I would say I prefer dOrcia, a UNESCO world heritage site,
child of Salvatore Ferragamo, the most beautiful city in world, where the countryside, he concedes after a mo- largely unchanged since the 15th century.
who rose to fame creating shoes I was born as well as Castiglion del ments thought. Ive not, so I mention another area in Tus-
for the stars of Hollywood in Bosco, a 5,000-acre estate in the Val He brushes off my surprise that he cany that I have visited and considered
the 1920s, Massimo is Chairman dOrcia region of Tuscany. Stateside he doesnt also own a waterside property very beautiful. It is nice there, he replies
To be honest, a collection of houses
of Ferragamo USA, and pursues
personal and family projects in his
has an apartment in Manhattan and a like many other UHNWIs or a ski chalet, politely, but its not the same. Del Bosco can also be a collection of headaches
native Tuscany. is somewhere very special. All you can see
is green, green and green, and nothing to
ruin the view of the landscape.
Originally, the plan was to turn the
As a family we dont speculate. There estate into a very exclusive private mem-
is not a speculative piece of DNA in our bodies. bers club. However, in the wake of the They immediately recognised and Given that Mr Ferragamo has such a
When you speculate its like musical chairs financial crisis, Mr Ferragamo changed respected that Castiglion del Bosco is peripatetic lifestyle, I wonder if he has
his model. The estate is still very exclu- deeply rooted in the Tuscan way of life. time for any other investments of pas-
sive, but visitors can now stay in the hotel As well as his cherished Tuscan estate, sion apart from property maybe art or
and villas and join Italys only private golf Mr Ferragamo is also involved with his classic cars. As a family we own art, al-
club, which is located on the property. A familys wider property portfolio, which though Im not really a collector myself,
especially as his wife skied for the Italian number of the estates villas have also includes five boutique luxury hotels in he says. But as befits somebody who likes
national team. He says he likes to keep been sold to an international range of Florence and Rome They are doing to make his own rules when investing in
things simple. buyers. We renovate the villas for the very well, so we might open outside of property, it turns out that he does have a
To be honest, a collection of houses owners, and when the owners are not in Italy and the freehold of many of the suitably individual collection that takes
can also be a collection of headaches, he residence, we manage all aspects of Ferragamo shops around the world. Real pride of place in his Florentine study.
says, and there are so many lovely the property. estate became second nature to us almost I do love sports, so I like to buy an-
places around the world to stay and ski. The process of rejuvenating the estate, by chance. Were allergic to paying rent, tique silver trophies. You can get a nice
The whole family is also a great lover of which dates back to the 10th century, has he says. surprise when you turn them over and
boats, so we prefer to actually be on the clearly been a labour of love. You cannot I ask if he has a philosophy when it see they were made by Mappin & Webb,
water, not just looking at it. own a property like this without it having comes to investing.I call it the three Ls Asprey or Garrard. His favourite, he
Helping people avoid the problems a purpose. You have to create a synergy I have to love something, it has to be in a says, is a huge 1904 silver charity shield
often associated with second-home for all its elements the land, the build- good location and the investment has to from England, once competed for by a
ownership was one of the reasons behind ings, the vineyards to bring it back to be for the long term. If you stick to those team called the Corinthians against the
the development of the Castiglion del life again. rules in real estate youll never lose. winners of the then equivalent of the
Bosco estate, which he stumbled across After weve talked and just as The As a family we dont speculate. There Premier League.
by chance when looking for somewhere Wealth Report is about to go to press, Mr is not a speculative piece of DNA in our Although he hates to overpay for
to make wine. He certainly wasnt looking Ferragamo gets in touch to let me know bodies. When you speculate its like musi- anything, Mr Ferragamo says, as with prop-
for a project of that scale the estate in- that Rosewood Hotels and Resorts, after cal chairs if the music stops and you erty, you have to like what you buy and be
cluded many medieval buildings in need careful consideration, has been appointed dont have somewhere to sit, youve got a prepared to hold it, and then in the long
WELL-HEELED The Ferragamo Museum in Florence of renovation but he fell in love with it. to manage the estates hotel and villas. problem, he adds firmly. term it will prove to be a good investment.
PROPERTy
PROPERTy INVESTMENT
INVESTMENT 46 47 THE WEAlTH REPORT 2015

Global trends and markets:

the need-to-know guide for
UHNWI property investors

UHNWI appetite for

property increases
In the 2014 edition of The Wealth Report, of our Capital Markets Survey show that 01
almost half of the wealth advisors who wealthy investors are allocating more of Commercially minded
took part in our annual Attitudes Survey their funds to property investments out- An estimated $619bn of
said that their UHNWI clients would po- side their own country. More peripheral commercial property deals was
tentially increase their investment alloca- markets such as Ireland and Spain are transacted in 2014, a 7%
increase on the previous year
tion to property during the year. In this benefiting from this trend.
years survey, almost 40% of respondents Demand for alternative property assets 02
said that had actually happened. is also growing, and is leading to more
Big deal
Property is definitely back on the private investment into business-critical UHNWIs were active in the
agenda for private investors, who ac- opportunities like health care and student market during 2014, accounting
counted for around a quarter of all com- accommodation. UHNWIs are adopting for over $150bn of commercial
mercial property deals last year, as well as increasingly sophisticated investment transactions. The biggest was
residential investments. Tracking the ex- strategies, and sometimes this approach the $1.15bn purchase of
londons Gherkin by a wealthy
act proportion is difficult because many involves the kind of active management Brazilian family
transactions, while essentially funded previously restricted to institutions and
by an UHNWI, are fronted by a family- funds. Examples include refurbishment 03
owned fund, company or private office. and development projects. Global ow
The tangible nature of property, Goodwin Gaw, who we interview at the UHNWIs are increasing the
especially when located in leading cities end of this chapter, is one of Asias lead- amounts they invest overseas,
such as London, is one of its enduring ing property investors and exemplifies according to the results of our
Capital Markets Survey
attractions. But UHNWIs are now looking this value-add approach. Where others
beyond prime or trophy offices and retail may see down-at-heel neighbourhoods,
space as a safe haven for their funds; they he sees opportunities for regeneration
are prepared to look up the risk curve to and social change.
non-core locations. According to our latest Attitudes
This may mean moving outside a Survey results, the UHNWI hunger for
capital citys CBD area, where yields have property as an investment remains
become increasingly compressed, or undimmed. Falling oil prices should free
heading into secondary cities where bet- up more capital to be spent on consumer
ter value and higher returns are available. goods, which should in turn present
Increasingly for many UHNWIs it also more property opportunities to feed the
means investing overseas. The results increasingly hungry private investor.
property investment 48 49 the wealth report 2015

Global property investment in 2014

By investor type (US$bn)

466

153

Commercial Top five private investor deals

of 2014
Private
Institutional

real estate in 2015

In a constantly changing world UHNWIs 30 St Mary Axe By sector (US$bn) By region (US$bn)

are finding value by investing ambitiously

in commercial real estate Type: Office
City: London Hotel Rest of world
JAMES ROBERTS, Chief Economist 64 8
Buyer: Safra Group
Industrial Asia-Pacific
If I had to pick a single word that could ap- paying tenants. I see global sales rising by US$1,152m 87 125
ply right across the global economy at this another 6% in 2015, with value-add rising refinery blues The slump in oil prices may be bad news for producers, but it
time it would have to be uncertainty. This further up the agenda. Retail could benefit property markets
is why investors are looking at real estate. Private investors are following the 161 Europe

WINX The Riverside Tower 228

For the investor in the Middle East it is trend towards risk, which was not typical
uncertainty over the situation in Iraq and of previous property market cycles. Tradi- the equivalent of adding 18 new corpora- Europe enjoyed an impressive
Syria. To the European or Japanese inves- tionally, the private investor has targeted Type: Office Office North America tions the size of General Motors. China is rebound in investment last year, with
tor it is the move towards QE and whether prime assets, but last year a quarter of City: Frankfurt 307 286 far from a busted flush and actually some- investors re-entering the markets that
this will end stagnation. Conversely, the global commercial sales were to private Buyer: Susanne Klatten where to look for long-term opportunities. suffered most in the 2010 to 2012 period,
American or Briton faces uncertainty buyers, despite the move towards risk in That office rents have edged back rather like Spain and Ireland. In 2012 Spain saw
on how best to invest to capitalise on an evidence in many markets. US$436m than slumped in Shanghai and Beijing dur- just three deals of over 100m; last year
unfolding recovery. Today UHNWIs are as sophisticated ing challenging market conditions bodes there were 16.
A real estate investor knows that if the as many institutional investors, reflect- well for the long term, so I see resilience in The core eurozone economies of
lean years are to continue, one buys the ing that many have long-established real key centres. France and Germany were largely stag-
Novinsky Passage
safe prime assets, like offices in Manhat- estate portfolios. Moreover, in our digital Indias property market has experi- nant in 2014. However, property in the
tan or shops on the Champs-lyses. If age private investors are able to access a Forecast global enced a marked slowdown. However, on a gateway city of Paris has mostly defied
the economy is about to improve, the wealth of global information to inform Type: Retail investment volumes (US$bn) recent trip to Mumbai I was struck by the the gloom, and plans to develop new rail
riskier but higher-yielding properties are their decisions. In 2015 we expect to see City: Moscow energising effect of the reformist Modi gov- infrastructure will create future devel-
where opportunities lie. more private money in the value-add 2017 ernment on the business community. The opment hotspots. Berlin has a vibrant
Buyer: The Gutserievy
brothers 2016
asset market. 2015
Knight Frank India Real Estate Sentiment technology scene and a relatively low cost
Index reflects this, with confidence in the of living for young workers. I see more
The game changer
US$ 350m property industry nearly doubling in 2014. incubators for start-ups being developed.
Where next? Dubais commercial property is often UHNWIs are now an important force
For me the slump in oil prices that started overshadowed by the residential market. in the commercial property world and are
in 2014 is a game changer for the econo- In the cities that have led the recovery, Aman Resorts However, office rents are showing tentative operating at all levels prime, secondary,
my, and also for property investment. like London, New York and San Francisco, 657 704 770 signs of recovery, and Jebel Ali has been de- development and change of use. Opportu-
The world today uses more oil in four the skylines are peppered with cranes. Type: Hotel
clared the worlds most productive port by nities are opening up as the global econo-
months than it did during the whole of Since the Olympics London has added the Journal of Commerce, while passenger my moves into a new cycle. Development
City: Worldwide
the Second World War. The global oil bill seven new skyscrapers. In these cities numbers at Dubais international airport in particular is rising up the agenda in
Buyer: Adrian Zecha in
in 2014 was bigger than the GDP of Brazil higher-risk investment strategies are now JV with Peak Hotels and
Source: RCA, Knight Frank Research Note: Knight Frank continue to rise. This suggests the core the real estate world, and UHNWIs will be
Research estimates for 2014, and forecasts for 2015 to
but will be less in 2015. The fall in price in play, so real estate investors are asking Resorts
2017, are based on RCA data. economic areas of tourism, trade and travel part of the new wave of building.
will result in a huge transfer of money. where next they should buy to best ride are performing well.
Consumers will have more to spend, and the recovery. US$336m North America saw a strong increase
firms more to invest. Yet despite the rise A good starting point has to be the Today in sales volume in 2014 (+8%). New York
in spending, inflation will stay in check as places that have been struggling up UHNWIs are as and San Francisco are established in a new
energy is such an influence on other prices. to now. Renaissance Plaza sophisticated cycle, so investments need to have a value-
This comes at a time when real estate Commercial property sales in Asia- as many add angle, such as development or refur-
investors are already adopting a higher- Pacific fell by 5% in 2014. The regions two institutional bishment, or be a safe income counterbal-
Type: Office
risk profile. We estimate global commer- rising giants, India and China, are indica- investors, ance to riskier investments elsewhere.
City: Toronto
cial real estate sales volume increased by tive of trends in the broader region. In the US, CBD vacancy rates are lower
Buyer: Amancio Ortega reflecting that
7% in 2014 to around US$619bn in 2014, In China the land market has seen sales than in suburban areas. However, those
many
with value-add assets increasingly popu- drop by 22%, which is understandable in US$226m have long-
suburban office locations with good
lar. Value-add is any building where the a country that has built ghost cities in transport connections to CBD areas, and a
purchaser can grow the investment return the past. China is adapting to a new pace established mixed-use setting, are performing better.
via construction, changing to another use of growth, but the countrys projected GDP real estate This could offer opportunities to those
like residential, or signing up higher- increase this year from the IMF is about Source: RCA, Knight Frank Research portfolios comfortable with a higher-risk profile.
property investment 50 51 the wealth report 2015

The Wealth Report Global Capital Markets Survey 2015

Location UHNWI commercial property How has that changed Outbound UHNWI Inbound UHNWI Key
portfolio allocations over the past five years? investments investments

Own Other Own Other Preferred Preferred Investment Main Preferred

country country country country location sector rising? source sector Market performance

Australia 90% 10% YES Looking at the ongoing performance of

UK China commercial property markets, most of
China our capital markets teams expect prices
95% 05% NO Residential Office
UK Hong Kong to hold firm or increase slightly this year.
France But the outlook for Russia is more bearish,
80% 20% Belgium
YES
GCC with commercial values predicted to de-
Land Retail crease significantly in 2015. At the other
Germany 60% 40% YES
US GCC end of the spectrum, Spanish markets are
set to continue their rebound with prices
Hong Kong 80% 20% NO
UK China Increase Increase increasing significantly. Australia is also
slightly significantly expecting an uptick buoyed by strong de-
India 90% 10% YES
mand from Asian investors.
UK US
It will be interesting to see how the
Kenya 70% 30% YES
European Central Banks quantitative eas-
UK India Decrease Decrease
slightly significantly ing experiment unfolds. In other parts of
Malaysia 70% 30% NO the world QE measures have driven sig-
UK Singapore
nificant investment flows into alternative
Russia 70% 30% NO N/A N/A asset classes, such as property. From my
UK Remain
the same own experience, I think property invest-
Singapore 80% 20% UK
NO
China
ment will increasingly be considered more
mainstream and less alternative by UHNWIs.
South Africa 90% 10% UK
YES
China

Spain 80% 20% UK

YES
US
property investing, while others may be
UAE 60% 40% NO
UK India from a particular diaspora investing back
UK 80% 20% YES into their homelands for example, US-
Germany GCC
domiciled Indians, and ex-pat Kenyans.
US 80% 20% UK
YES
China
Those based in less stable parts of the
world are often seeking a safe-haven for
their wealth.
This safe-haven theme is also reflected
Predicted change in commercial property values in 2015
in the preferred locations and sectors for
those UHNWIs investing outside their Africa calling Cities like Johannesburg are attracting significant numbers of
Chinese UHNWI investors
own countries. The UK, and London in

UHNWI particular, was the most popular first-

choice destination.
property investment Germany was at the top of the list for
UK-based wealthy individuals and was a
The uncertainty around the extent of the
Chinese economic slowdown is clearly
goes global popular second for other European having an impact.
UHNWIs. For Asian investors, Australia For the UK and France, the Middle
Key trends from the results of The Wealth and the US were leading second or third East is the source of most private invest-
Report Global Capital Markets Survey
One of the
choice destinations. A Chinese UHNWI, clear trends ment, although those from other parts of
Deborah Watt, Head of Global Wealth for example, has just bought 175 Liverpool to emerge the world are making their presence felt,
Investments Street, a Grade A office building in notably Brazilian billionaire Joseph Safra
is the
Sydneys CBD, for AU$400m. who purchased Londons Gherkin.
In my role advising high-net-worth inves- Office buildings were the dominant
increasingly In Australia, the US and Africa, wealthy
tors from around the world, it is clear that commercial investment sector of choice, global nature Chinese investors are currently the most
the demand for property as an investment however, there is still demand for of private significant overseas investors.
class is increasing rapidly. residential buildings, particularly from investments Tony Galetti, Head of Knight Frank
To help analyse the global property UHNWIs making their first foray into South Africa, says the growth of UHNWI
investment activities of UHNWIs in more property investment. Chinese investment into South Africa has
detail, The Wealth Report conducted a Alex Foshay, of our New York Capital been impressive over the past few years.
survey of Knight Franks Capital Markets Markets team, highlights Miami, which There is a strong preference for indus-
teams in key locations around the world attracts a lot of interest from Latin trial property, he points out, with large
to find out where and what the super- American UHNWIs, as a case in point. industrial area, of greater Johannesburg
wealthy are buying. Demand has mainly been focused on that have been virtually all bought up by
One of the clear trends to emerge is condominium developments, but private private Chinese investors. There have also
the increasingly global nature of private investors are now starting to look at more been several trophy purchases, including
investments. UHNWIs still hold most of commercial sectors. a prominent Sandton skyscraper as well as
their property investments in their own In terms of inbound investment from several notable wine farms in the Western
country, but in the vast majority of the UHNWIs from other countries, there are Cape region.
locations surveyed, wealthy private indi- some interesting patterns. In the US, gateway cities, particularly
viduals have been increasing the amount China is not seeing an increase in the New York and San Francisco, are attract-
invested overseas. number of private individuals looking to ing not just Chinese investment, but also
Some are diversifying their portfo- invest in property there. The same pattern interest from Korean, Israeli and Middle
lios as they gain more experience with Source: The Wealth Report Global Capital Markets Survey is repeated for Hong Kong and Singapore. Eastern UHNWI, says Alex Foshay.
property investment 52 53 the wealth report 2015

The Wealth Report asks 10 property

investment experts from across internationally. Key cities such as London continue

Knight Franks global network to

to attract capital, but we have more recently seen
Middle Eastern investors moving up the risk curve to
highlight trends that private UHNW tier-two cities and UK regions, as well as peripheral
eurozone markets like Ireland, Germany and Spain.
investors should be watching closely TREND
More locally, in the Gulf, with high volatility across
both the local stock market and the Dubai residential
sector, we anticipate that assets such as commercial
Changing population and food real estate with long-term occupational leases will
Everybody
consumption trends benefit from the fallout, especially as Dubai preserves
has to eat, and
its status as the regions relative safe haven. Investor
interest is growing from the wider GCC (particularly the worlds
sector to watch:
agricultural land in the uk and africa Saudi Arabia), but also from countries such as India. population is
set to hit
tom raynham
nine billion
Head of Agricultural Investments, London by 2050.
Investing in
farmland is a
Investor interest in farmland continues to grow for a simple way to
number of reasons. First, demographics. Everybody buy into the
has to eat, and the worlds population is set to hit
TREND demand created
nine billion by 2050. Investing in farmland is a sim-
ple way to buy into the demand created by this trend.
by this trend
Chinese investors But not only will there be more mouths to feed; those TREND
diversifying their portfolios mouths are demanding more meat and dairy-based
TREND
foodstuffs, which require more land to produce per Reinvestment by US West Coast
unit of energy than traditional grain-based diets.
Locations to watch:
Miami, Manchester and Brisbane Second, tangibility. Off the back of the financial tech entrepreneurs
Rebalancing of economic crisis, farmland is increasingly being seen as a safe-
nEIL Brookes power in Africa haven inflation-hedging asset. In the UK values have sectors to watch:
risen almost 200% over the past 10 years, according the mission and potrero areas of san
Head of Capital Markets, Asia-Pacific
francisco and the new wave of tech clubs
sector to watch: to the Knight Frank Farmland Index. Third, the
grade a office and retail space in nairobi ability to add value to underutilised land. For the
Wealthy Chinese investors have been expanding from more hands-on investor this offers the opportunity Kyle Kovac
luxury residential properties into office buildings, Anthony Havelock to substantially boost capital values, particularly in Senior Managing Director, Capital Markets
areas with a higher-risk profile, and is something our San Francisco
shopping malls and hotels. The latest example is the Head of Agency, Nairobi
high-profile joint-venture purchase of the General experts in Zambia are helping a number of UHNWI
Motors Building in New York by Zhang Xin, chief investors achieve.
The decline of Cairos rental growth and also They may have already Valley into San Francisco
executive of office landlord Soho China. After several
commercial influence at yield shift, which in made their first billion proper as firms recognise
initial waves of Chinese institutional capital outflow,
the northern end of Af- turn is attracting global or 10, but changing the the latest generation of
Chinese UHNWIs are becoming part of the so-called
rica, and the realisation investors. In addition, world with one wildly tech talent wants to live,
Fourth Wave of investors, which also consists of
by international busi- newly discovered oil and successful idea like socialise and work in
insurance companies, small- to mid-cap state-owned
nesses that they cannot gas deposits are creating Twitter or LinkedIn the centre of the action.
enterprises and private developers. After heavy
run the entire continent something of an energy isnt enough. Tech Cash-rich companies like
investment into gateway cities and trophy buildings,
from Johannesburg in boom, while all sectors entrepreneurs who have Google are also buying
Chinese UHNWIs have established a familiarity with
the southern tip, has of Kenyas economy, seen their companies space, not renting it. In
transacting in these markets, and we expect that they
This year created a vacuum that apart from tourism, are mature to the point of addition to the renowned
will start to pursue higher yields in other commercial
should see the Nairobi is eagerly filling. growing GDP is rising initial public offering are SOMA district and
property sectors. We will see them moving beyond
continuing to reinvest burgeoning Mid-Market
opening of the gateway cities of London, New York and Sydney With the arrival and at around 5.5% each year. behaviourial
TREND
expansion of a string of This is largely being their intellectual and area, neighbourhoods
around 1.8m and investing into other key cities, such as Frankfurt,
monetary capital into such as the Mission and
square feet of Brisbane, Miami and Manchester. In fact, cities like multinationals, the city driven by a burgeoning Middle Eastern economic and new start-up companies Potrero districts are be-
First World Miami are already firmly on the radar of the wealthy is now firmly established middle class hungry for political instability with their own require- ing targeted by smaller
Chinese investors, as the prices of apartments there as one of Africas leading Western-style goods and
shopping malls ments for office space. and start-up tech firms.
are up to 25% lower than in Shanghai. A key trend hubs. Local developers shopping experiences
in Nairobi sector to watch: However, while the A growing sector in the
remains the cultural diversity of the city, and of grow- have responded by build- that, by and large, seems Commercial property in the uae
ing Grade A quality office impervious to political hunger to discover the town is the establishment
ing importance is the quality of life offered. These
space that is attracting controversies and terror- next game-changing of luxurious private tech
factors will continue to draw in Chinese UHNWIs.
top-quality tenants pay- ism activities. This year Joseph Morris technology remains un- clubs such as The Bat-
Head of Capital Markets, Middle East diminished, the location tery, where entrepreneurs
ing dollar-denominated should see the opening of
rents with leases that around 1.8m square feet of the search has shifted. and developers can hang
include fixed annual in- of First-World shopping We are seeing a move out and share ideas.
Last year was a tumultuous one for the Gulf region. away from the Silicon
creases. Generally, rents malls in Nairobi, with After an extremely positive start to the year, contin-
are perceived as good new international retail- ued political and economic instability in the Middle
value by international ers committing to the East, as well as sharp falls in oil prices, hit confidence
firms, suggesting there is region for the first time. hard across local capital markets. As a result, we have
room for healthy future witnessed further investment flows from the region
into stable, income-generating commercial property
PROPERTy INVESTMENT 54 55 THE WEAlTH REPORT 2015

investment, particularly from the fast-growing IT

sector, with Google, Twitter, LinkedIn and Facebook
all expanding their Irish operations in 2014. Mirror-
ing the broader economy, the property sector has
rebounded from the lows of 2010/11, with strong oc-
cupier demand pushing up rents in all sectors. With
very little new construction over the past five years For more information on
and a limited development pipeline, rents are likely Knight Franks Commercial
TREnD
to continue to grow strongly over the next 24 months. Property and Capital Markets
Although the total property return is predicted to teams please contact
Rising interest in exceed 36% in 2014, property values are still ap- [email protected]
long-term renting proximately 20% below their peak, offering potential
for attractive investment returns. Investor demand,
SECTOR TO WATCh: buoyed by the strength of the dollar against the euro, TREnD

nEW-BUilD REnTAl ACCOMMODATiOn in ThE Uk is largely from US private equity funds that have
Owning targeted both large-scale asset and loan portfolios. Business-critical assets oer
their own home JAMES MAnniX
Although they have now been joined by some of the long-term security
still remains Head of Residential Capital Markets, UK European pension funds and Middle Eastern inves-
tors, demand from UHNWIs has so far been limited
a key aspiration SECTORS TO WATCh:
to some Asian interest in the hotel sector. With a
for most people hOTElS, STUDEnT ACCOMMODATiOn, hEAlTh CARE
Owning their own home still remains a key aspiration number of trophy residential and commercial assets
in the UK, still to be traded, the market offers international
for most people in the UK, but a growing number of
but a growing young professionals now see renting as a long-term private investors a stable environment with potential ShAUn ROY
Head of Specialist Property Investment, london
number option rather than as a stopgap while they save to for attractive returns.
of young buy a property. In part this has been driven by the
professionals increasing cost of joining the housing ladder, but it A change in consumer behaviour and societal trends,
now see renting also reflects transitional modern lifestyles as people and the increasing rise of the internet, has made
as a long-term switch jobs more often and want the freedom to property investors look more closely at traditionally
option move from one location to another. This demand non-core options. While the three main sectors of
rather than as for rented property provides investors with a secure logistics, offices and retail continue to dominate,
a stopgap return because it is easy to find another tenant when specialist property sectors, predominantly compris-
TREnD
one moves on. The private-rental sector model in ing student accommodation, hotels and health care,
the UK is also evolving. Purpose-built developments have substantially increased their impact on the Generational shifts in UHNWI
maximise returns by carefully balancing social and investment landscape, particularly with UHNWIs. investment strategies
private space. More compact and efficiently laid-out TREnD The main rationale is that the physical properties
apartments allow more units per development, but themselves in these sectors are business-critical as- SECTOR TO WATCh:
I am
this is offset by better communal facilities like gyms, Asian interest in sets without the building the operator will not have ASSET MAnAGEMEnT OppORTUniTiES
and more luxurious private space such as en-suite increasingly
bathrooms and balconies. London is still hugely Australia a business and will generally benefit from long-term in ThE OFFiCE SECTOR
seeing the
leases to good covenants, with fixed or inflation-
popular for investors wanting a long-term secure linked increases contained within the leases. This second or third
asset, but higher yields are on offer in regional cities SECTORS TO WATCh: DEBORAh WATT
nOn-CORE, SUBURBAn OR pROvinCiAl
provides the UHNWI investors with an asset class Head of Global Wealth Investment, london generation
like Birmingham, which will benefit from the HS2
OFFiCE MARkETS they will generally be familiar with, combined with of UHNW
railway. Annual net yields of over 5% are available. an easy-to-manage and hands-off investment that re- families being
quires little active property asset management. With I am increasingly seeing Capital gain through allocated a
JAMES pARRY all occupational markets within these subsectors
Head of Institutional Sales and Capital Markets, Australia the second or third development is popular, proportion
seeing robust high-calibre demand for best-in-class generation of UHNW as are higher- income of the familys
locations, there should continue to be a pipeline of families being allocated yields, possibly through investment
good-quality supply from tenants in solid occupier a proportion of the fam- buying offices in strong
Although some com- positive spread between portfolio to
markets. This all signals sound investment opportu- ilys investment portfolio regional, rather than
mentators are saying that property yields and fund- invest into
nities for investors looking for wealth preservation to invest into commercial capital, cities or looking
Australian commercial ing costs is opening up. commercial
and wealth generation. real estate. These gen- at different sectors such
property is now fully This is most accentuated
erations are generally as logistics. Overall there real estate
priced, partly on the back for non-CBD secondary
of continued demand grade, suburban and pro- more globally educated is uncertainty about go-
from Asian institutions vincial office stock. Cross- often in the UK or the ing into property funds
TREnD
and private investors, I border capital flows will US than their parents to achieve exposure to
believe the market still increase further because or grandparents and are this sector the younger
Property markets lagging in offers opportunities for of the depreciation of approaching investment generation want control
economic recovery UHNWIs. While current the Australian dollar, in a fashion more akin and believe that they
premium (trophy) yields driving even higher sales to a professional fund or will achieve as good, if
SECTOR TO WATCh: in Sydneys CBD are volumes and asset prices. wealth manager. There not better, returns than
iT in iRElAnD almost comparable to This will be complement- is more of a focus on if they handed over
the 2007 nadir, yields are ed by a more positive cash-flow analysis of the capital to a fund man-
still relatively high on outlook in the occupier investment, and on ager. There is a culture of
ADRiAn TRUEiCk
Investments, Dublin a global basis and there market, particularly in analysis of tenant cov- wanting to prove to their
is the expectation that east coast cities where enant strength and local fathers or grandfathers
local funding costs will stock levels are falling market drivers. They are that they can grow and
Irelands economy was one of the first to rebound fall to their lowest levels because of conversion of looking for performance protect the family wealth
from the financial crisis, with current growth rates on record in 2015 and re- former commercial space over trophy assets. for future generations.
of over 7%. One of the main drivers of the recovery main lower for longer. into hotels and residen-
has been the countrys ability to attract foreign direct This means a substantial tial accommodation.
PROPERTY INVESTMENT 56 57 THE WEALTH REPORT 2015

Personal perspectives
on property
into the Philippines, it has been because Having cut his property teeth on a cinctly lists Hong Kong and Los Angeles
The Wealth Report Editor Andrew he ventured outside his core investment hotel redevelopment, Mr Gaw continues Those are the places where I do busi-
Shirley talks to G O ODWIN GAW about philosophy. to be drawn to hospitality and lifestyle op- ness. But he gets more animated when I
his passion for property and why I like to invest in markets with con- portunities around the world, but Im not ask about second homes. We do have a
straints, he says places like London, surprised to hear he still likes something house in a members-only club in the Mon-
investing in the wrong side of town Hong Kong and New York, where physical with a bit of an alternative angle to it. tana mountains, he says. The air is so
can sometimes be the right move boundaries and planning policies create He helped, for example, bring renowned clean up there.
zones where people want to live or busi- hotelier Nick Joness arty Soho House He pauses, thinks and then adds: I
nesses need to be located. concept to Chicago and is also looking at think that is a concept that could really de-
Houston was never a market that I Hong Kong. velop in China. People are becoming more
liked. Theres no zoning, and if you look As we wrap up the interview I ask him and more interested in healthy lifestyles
out from the top of a tall building all you where he chooses to live and why. He suc- and organic food. Watch this space.
can see is land. But I thought that if I reno-
vated the building I could charge higher
rents, but people just go and build some-
where else. It taught me that if a market is
high enough for you to want to sell some- Asian HNWIs are looking for safety rather
thing, then just pay the tax.
He adds, The Philippines wasnt an
than pure upside at the moment, and that
easy place to do business. Its really an in- means markets with liquidity places like
The first thing I notice when talking to slew of further investments, including the siders market. London and New York
GOODWIN Goodwin Gaw in his Hong Kong office is conversion of over 40,000 square metres Although his family bought and rede-
GAW veloped one of Yangons best hotels My
that property development is clearly more of empty historical buildings into trendy
than just a business for him. It is some- residential lofts, which helped rejuvenate grandfather was brought up in Burma, my
thing he is deeply passionate about at a the then down-at-heel downtown area of father was born there investors arent
Hong Kong-based Goodwin Gaw
is one of Asias most influential and very personal level. Los Angeles. generally flocking towards emerging mar-
innovative property developers and in- I was always into building things and Re-urbanisation, or reverse suburbani- kets now, he says.
vestors. Investing his own money and architecture as a kid. I even thought I sation, is a big theme, he tells me. There Asian HNWIs are looking for safety
that of his investors, he has built up rather than pure upside at the moment,
wanted to be an architect. So my dad sent is no reason people should be scattered in
a diverse residential, commercial and
me off to work with one, but then I realised lots of suburbs. They may be socialising and that means markets with liquidity
leisure portfolio spanning Europe, Asia
and North America. something: apart from a few very success- online, but they want to collaborate in a places like London and New York. Tokyo
ful ones, and even then only later on in physical space. also looks like an interesting play.
their careers, architects generally build To me real estate is not just a category But he still likes to focus on the edgier
what their clients want, not what they of investment. Its living bricks and mor- parts of town and is eyeing up Hong Kongs
want to. tar. I feel a lot of the time its not about the Sham Shui Po neighbourhood. He remains
For many in the real estate industry, its money. The aim is to change neighbour- upbeat about China Apart from the US
the deal that is their lifeblood. But I dont hoods, make them better places to live, it will be the worlds only self-sustaining
get the impression that this is what makes to take an ugly duckling and turn it into economy and is involved with a US$1bn
Goodwin Gaw tick. For him its the chance something sexy and trendy. redevelopment of a Beijing vintage-style
to take something unloved, recycle it and However, Mr Gaw is quick to point out retail outlet. It will be a fresh new take on
bring it back to life. that financial success generally follows. something that is obsolete. It will be cut-
Take his very first investment, for ex- The goal is to create a return for investors, ting edge.
ample. In 1995 he bought Hollywoods although some have asked me, Are you Cities go through cycles, he explains.
At one point everything old is considered
obsolete, but then people get nostalgic for
it. You need history. Take New Yorks meat-
packing district, Londons Shoreditch. To
be a truly global city you need that charac-
The aim is to change neighbourhoods, ter, that variety.
make them better places to live, to take an
ugly duckling and turn it into something
sexy and trendy

iconic Roosevelt Hotel, bankrupt and a having too much fun? But I tell them when
shadow of its former life, which witnessed Im having fun thats when I know things
some of Tinseltowns most historic are going well. And I am always investing
events, including the inaugural Academy my own money into every project.
Awards and Marilyn Monroes first model- He says he hasnt miscued too many
ling shoot. times, and on the few occasions a deal
Not only is the hotel again the cool hasnt really fired, like a tax-driven rein- FIRST TIME LUCKY The Roosevelt Hotel, Hollywood, has been one of Goodwin Gaws
place to be seen, but the deal spurred a vestment acquisition in Houston or a foray most satisfying investments
LUxUrY sPeNdiNg 58 59 tHe WeaLtH rePort 2015

investments of passion:
performance and luxury
spending trends

Luxury
research
And now for the fun stuff. So far in The We list some of the most high-profile 01
Wealth Report weve talked about big sales in our special feature on p64. Rule britannia
and important themes like global wealth Pearls, which until recently were the UK tops The Wealth
distribution, the worlds most important considered rather old-fashioned, are also Reports new Big spenders
index, produced for us by
cities, property markets and investments. rising rapidly in value. This trend is being
Ledbury research
In this chapter we look at exciting helped by the almost total lack of supply
things like luxury goods, classic cars, art, of new natural pearls coupled with strong 02
jewellery and fine wine. demand from the Arabian Gulf, where Vroom, vroom
Of course, this being a serious re- many of the worlds finest pearls were Classic cars were once again
search publication we naturally look originally harvested. the top-performing asset class
at such purchases from an investment Indeed, much of the recent demand for in our Luxury investment index,
perspective. The latest results from the luxury goods and investments has been rising by 16% during 2014.
overall the index rose by 10%
Knight Frank Luxury Investment Index, driven by wealth creation in regions with last year and has grown by a
which tracks a theoretical portfolio of 10 burgeoning economies like Asia and the healthy 205% over the past
investable luxury assets, show that many Middle East. It is therefore intriguing to 10 years
of these investments of passion have see that the UK tops our new Big Spenders
seen their values continue to rise. Index, compiled for The Wealth Report by 03
Although, according to the results Ledbury Research. shining bright
of our Attitudes Survey, the personal The index tracks the countries likely Coloured diamonds now feature
pleasure they provide is the main reason to see the strongest growth in spending in our index. on average their
value has risen by 167% since
most UHNWIs like to collect beautiful on big-ticket luxury items by their own 2005
and pleasurable things, one suspects UHNWI populations and visitors from
that even the most epicurean collectors abroad. It would be fair to say that the
would prefer that their treasures grow UK secured poll position off the back of
in value. the many visitors who flock to Londons
Coloured diamonds are the latest ad- luxury stores and increasingly out-of-
dition to our index. Given that jewellery town designer outlets like Bicester Village
has historically been a common way to the second-most visited destination in
store and transfer wealth in many cul- the UK for wealthy Chinese tourists and
tures, diamonds are perhaps one of the part of a string of similar villages around
most multifunctional assets in the index. the world.
luxury spending 60 61 the wealth report 2015

The Big Spenders Index 2015

Hey, big spender Top 10 highest-scoring countries according to the Big Spenders Index,
based on scores in the following categories

The results of a new index compiled for

The Wealth Report by Ledbury Researchs Luxury store
footprint
Premium travel
and spending
Big-ticket luxury
goods spending
Luxury Analysis team
Spending on luxury UHNWI population
MADELAINE OLLIVIER, Luxury Wealth growth
imported items
Analyst, Ledbury Research
Almost a third
of respondents
The general outlook for luxury spending RANK COUNTRY to The Wealth
continues to be positive. Almost a third
of respondents to The Wealth Reports Reports
Attitudes Survey expect their wealthy Attitudes
1 9 5 8 7 5 5 Survey expect

UK
clients to spend more on luxury goods
in 2015, compared with just 8% who 10 10 10 10 10 10 their wealthy
expect it to decline. clients to spend
2

China
But how does the short-to-medium- 10 7 2 6 7 7 more on
term outlook compare for individual 10 10 10 10 10 10
luxury goods
countries, and where in the world might in 2015
3
Qatar
luxury brands look to expand? The new 7 10 9 10 2 2
Big Spenders Index, compiled exclusively 10 10 10 10 10 10 set fair Yacht sales are on the rise
for The Wealth Report, provides some of
Canada

the answers by identifying the locations 4 9 8 5 10 3 4

likely to see strong growth in big-ticket 10 10 10 10 10 10
spending by their own ultra-wealthy
populations and visiting UHNWIs.
5 8 10 10 5 1 4 Luxury Spending Trends
India

Topping the list for 2015 is a very well-

10 10 10 10 10 10
established centre of wealth, the UK. The Drawing on extensive monitoring of luxury markets around
Switzerland Saudi Arabia

country scores well, in terms of both the the world, Ledbury Research picks out interesting developments
fortunes of its domestic UHNWI popula- 6 8 5 9 10 4 3 within the main luxury goods categories
10 10 10 10 10 10
tion, thanks to the relative strength of the
UK economy, and our tracking of the driv-
ers and indicators of high-end spending. 7 10 8 6 6 3 4
The finding underlines the importance of 10 10 10 10 10 10
A PPA R E L WATCHES A N D JE WE LLE RY CA RS
the UK for luxury brands, which sold over Wearable technology and Womens watches boom India lags
Mexico

8bn of goods in the country last year, 8 9 8 6 9 1 4 luxury overlap

according to Ledburys estimates. 10 10 10 10 10 10 Women have traditionally been more Manufacturers had been hoping that
China fills the second slot in our rank- With the wearable tech trend continuing, interested in smaller, unobtrusive styles India would follow in Chinas footsteps for
Hong Kong

ing table. The Chinese are already the 9 9 9 9 2 2 3 fashion brands have been collaborating unable to accommodate the complex- luxury car demand, but most have seen
single biggest consumers of luxury goods 10 10 10 10 10 10 with tech companies to help break into ity and multifunctionality of traditional disappointing sales and sluggish demand.
around the world, accounting for some the market. But fashion brands are also mens watches. But a fashion for slightly Only 250 supercars are estimated to have
29% of the global luxury spend, according
Kuwait

10 6 7 8 10 2 2 choosing to make their own wearable, larger watches and jewellery, combined been sold in the country in 2014 (HIS).
to consultants Bain & Altagamma. 10 10 10 10 10 10 style-conscious tech. Ralph Lauren is with the growing purchasing power of Import duty hikes and currency declines
Although recently much has been said pioneering this strategy through its newly women, particularly in luxury strongholds arent helping, but a more fundamental
about the impact of the Chinese govern- unveiled line of smart clothes dubbed such as China, is helping drive sales. The obstruction comes from Indias roads.
ments anti-graft measures on luxury Source: Ledbury Research Polo Tech. Embedded technology in the share of female watches in the market However, manufacturers could benefit
demand, Ledbury has consistently argued clothes allows users to monitor their has risen to around 35% from 20% in 1995 from impending releases of luxury SUVs.
that the fundamentals of the Chinese exist towards luxury within the different Indian wedding gift is fast evolving away bodies on their smartphones. (Bain & Altagamma).
luxury market remain very attractive, Chinese cities. from silver plates towards top Western YACHTS
given the burgeoning wealthy population India, one of the lower-profile BRIC designer brands. ACC ESSO R I ES F I N E WI N ES A N D SPI RI TS Market recovers
and rapidly growing middle class. Chinas economies, is in fifth place in our rank- We also anticipate that wealth crea- Pre-owned luxury Chinas slowdown particularly
high ranking in the Big Spenders Index ings. Over the past year the rise in wealth tion, and luxury consumption, will be affects Cognac sales At the 2014 Monaco Yacht Show, ship-
reflects the underlying robustness of its and the number of wealthy has been neither quite as controversial nor quite Pre-owned luxury goods sales are boom- builders, brokers and outfitters all said
UHNWI population. impressive the number of UHNWIs is in- as hampered by social inequality or ing. The second-hand market for luxury French wine and spirits exports fell 7.3% that the market was improving 35% more
While overall sales performance of creasing rapidly, according to our Wealth austerity agendas as has been the case in apparel, accessories, watches and jewel- to 4.8bn in the first half of 2014, hit by a superyachts were sold in the first half of
luxury goods in the Greater China region Model. Aligned to this wealth growth is Brazil and indeed, latterly, China. With lery is valued at some $19bn (Bain & 28% fall in sales to China. Cognac exports the year compared with the same period
has been muted over the past year, there an equally substantial increase in luxury Indias long-standing caste system, wide Altagamma). Leather goods and clothing to China fell 12% (Fdration des Expor- in 2013 (Camper & Nicholsons Interna-
is no denying that there is still a strong consumption: the value of champagne gaps in incomes and wealth are an ac- make up $4bn of that, and the segment is tateurs de Vins & Spiritueux de France). tional). This is despite some caution in the
demand for luxury brands, which isnt imports rose 19% year on year, according cepted norm in the country, according to growing faster than the luxury industry The Chinese governments continued industry because of the political uncer-
going to change. to the most recent data from Le Comit Kotak Mahindra. overall (Bloomberg). Some products sold austerity campaign is thought to be part tainty within Russia and the Middle East,
However, what is certainly changing is Interprofessionnel du Vin de Champagne, Reflecting on the regional make-up of on these marketplaces achieve prices of the explanation for the drop in Cognac traditionally seen as the strongest markets
where Chinese consumers are choosing to despite total exports being flat. the top countries, it is interesting to see higher than retail, as customers bypass sales as the spirit is associated with gift- for superyachts.
buy luxury (the vast majority of Chinese We expect international luxury goods Europe, Asia and the Middle East all well waiting lists for items such as new ing. Scottish whisky sales are, however,
luxury spend is outside mainland China), to be particular beneficiaries of this new represented. Africa is noticeably absent Herms bags. reporting an uptick in other emerging
the selection of luxury brands they are wealth in India, rather than more tradi- this year, reflecting some weakening on Asian markets as the spirit is associated
buying, and the profiles of the consumers tional, local brands. For example, research the continent, notably in commodity- with status.
themselves, which are rapidly evolving by the Kotak Mahindra bank has shown fuelled wealth, which had propelled the
because of the varying attitudes that that among the wealthy, the traditional success of a number of countries.
luxury spending 62 63 the wealth report 2015

Sparkling returns Going, going, gone

The latest results from the Knight Frank Some of the record-breaking or most significant luxury investment auction results of 2014
Luxury Investment Index (KFLII), which
now includes coloured diamonds
ANDREW SHIRLEY,
the Wealth Report Editor

There is no doubt that so-called invest- tion specialising in coloured or fancy mond Sancroft-Baker, who compiles the
ments of passion are still catching the diamonds, along with a new index track- index on behalf of Art Market Research,
imagination of the wealth management ing their performance. Because of their says that demand for top-quality coloured
sector and the media. I continue to be rarity these generally pink, yellow or blue gemstones is also very strong. Weve seen
pleasantly surprised by the press coverage stones command very high prices at auc- a million dollars a carat paid for a Bur-
devoted to KFLII since it was launched tion and seem to fall more readily into the mese ruby recently, and 200,000 a carat
two years ago. category of investments of passion. (See for a Kashmir sapphire.
One question I have often been asked is our special focus on diamonds on p64 for The market for pearls is also extremely
why we dont include gold or diamonds in more details.) buoyant, says Mr Sancroft-Baker. There
the index. Gold to me has always seemed So how has this newcomer to KFLII is a lot of demand from the Gulf States,
more of a conventional investment that performed compared with the other asset who are buying back their heritage. I 01 02 03
tends to sit mainly in a bank vault, while classes that we track? Since January 2005 recently valued a pair of natural pearl ear-
the pricing indices available for white The Fancy Color Diamond Price Index has rings at a million pounds.
diamonds were too broad in their scope increased by 167% in value, which inter- Once again classic cars have been the
for inclusion. estingly is almost exactly the same rise as strongest performer in KFLII over both the
Now, however, a group of industry the wider jewellery index that we use. long and short-term, with the value of the
experts has formed a research founda- Christies jewellery consultant Ray- HAGI Top Index rising by an astounding

Performance of the Knight Frank Luxury Investment Index by asset class, Q4 2004 to Q4 2014*
Sources: Art Market
Research Furniture,
Chinese Ceramics,
Furniture Watches Chinese Coloured Jewellery Stamps Coins Wine Art Classic
Jewellery, Watches, Art.
ceramics Diamonds cars Stanley Gibbons
Stamps, coins.
HAGI Classic cars.

487%
Wine Owners - Wine.
500% Fancy Color Research
Foundation Diamonds. 04 05 06
400% *Except coloured
diamonds, Jan 2005 to 01 Edward VIII gold sovereign. Sold by Baldwins for 516,000 02 1962 Ferrari 250 GTO Berlinetta. Sold by Bonhams for $38m 03 Chariot, by Giacometti. Sold by Sothebys for
Oct 2014 $101m 04 British Guiana 1856 one-cent black on magenta stamp. Sold by Sothebys for $9.48m 05 1933 Patek Philippe Supercomplication pocket watch. Sold by Sothebys for 23.2
252%

300%
234%

million Swiss francs 06 The Mellon Blue Diamond. Sold by Sothebys for $32.6m
232%
195%
168%
167%

200%
140%
92%
73%
69%

61%
68%

12-month performance
49%

46%

100%
35%

34%

38%

16%

487% over the past 10 years and growing auction sale of the year, making almost tioned for $9.48m by Sothebys New York
15%
13%

7%
9%
-25%

-28%

5-year performance
4%
-9%

3%
2%

2%

10-year performance
16% in 2014. This actually represents some- $101m at Sothebys record-breaking No- in June.
0%
thing of a slowdown, following the indexs vember sale of modern and impressionist The 1933 Patek Philippe Supercompli-
staggering 47% surge the year before. art in New York. cation pocket watch was another record
The 10-year performance of the Knight Frank Luxury Investment Index HAGI founder Dietrich Hatlapa says However, instability in certain parts breaker when it sold for 23.2 million Swiss
the market is returning to normal of the world is having an impact on spe- francs at Sothebys in Geneva, the highest
10 yrs: 205%

although a 1962 Ferrari 250 GTO Berli- cific sectors of the market. At a Sothebys price for any timepiece sold at auction.
350% netta did set a new world record when it evening sale of high-value Russian art in The overall watch market, however, re-
went under the hammer for $38m at the London only 32% of the 37 lots on offer mained stable with annual growth of 4%.
300% Bonhams Quail Lodge sale in August. found buyers. Knight Franks Fine Wine Icons Index
In general, however, classic Porsche Coins were the only other asset class was up 7% on the year, with strong growth
5 yrs: 62%

250% models performed most strongly in 2014, to achieve double-digit growth in 2014 for certain US and Italian vintages. But
while more-modern supercars from the with gains of 13%. A rare Edward VIII, the top end of the Bordeaux market is yet
200% 1970s and 80s, like the Lamborghini 1937, gold sovereign made 516,000 when to stabilise, although it should finally bot-
1 yr: 10%

Countach and Ferrari F40, are growing in it was auctioned by Baldwins in May. tom out in 2015, says Nick Martin of Wine
150% The Knight Frank Luxury popularity, adds Mr Hatlapa. Our benchmark philatelic index the Owners, which compiles the index.
Investment Index
(KFLII) is a weighted After a few years of relatively languid Stanley Gibbons GB250 grew by just 3% The value of antique furniture contin-
100% index based on the performance, art appears to be bouncing over the year, but the market for Chinese ued to fall in 2014.
performance of 10
indices provided to
back, with annual growth of 15%, accord- and Commonwealth stamps continues to Overall, KFLII grew by a further 10% in
50%
Knight Frank by the ing to data from Art Market Research. grow strongly, says Keith Heddle, Head 2014 and has risen by 205% over the past 10
third-party sources The art market has fully recovered from of Investments at Stanley Gibbons. The years. Although this doesnt take into ac-
0% listed.
the economic crisis, says Harvey Mendel- sole remaining example of a British count any storage, maintenance, insurance
Dec 04 Aug 05 Apr 06 Dec 06 Aug 07 Apr 08 Dec 08 Aug 09 Apr 10 Dec 10 Aug 11 Apr 12 Dec 12 Aug 13 Apr 14 Dec 14 son, of art advisory firm 1858 Ltd. Chariot, Guiana 1856 one-cent black on magenta or dealing costs, it does help explain the
by Giacometti, was the most expensive set a new world record when it was auc- ongoing interest in luxury investments.
LUXURY SPENDING 64 65 THE WEALTH REPORT 2015

SPARKLING COLOURED

Multifaceted DIAMOND BUYS

investment opportunity A pair of pear-shaped yellow

diamond ear pendants (52.88
and 51.46 carats) sold for dou-
To coincide with the introduction of ble their presale estimate at
$5.4m at Christies New York
coloured diamonds into the Knight in December 2014
Frank Luxury Investment Index,
industry expert CLAIRE ADLER The oval fancy light pink Gol-
explores the growing appeal of Overall, fancy pink, yellow and blue conda diamond (21.3 carats)
diamonds as an investment of passion diamonds have increased in value by 167%
sold for $4.3m at Christies
New York sale of Magnificent
since 2005, according to the new index. Jewels in December 2014
Individuals looking to invest in dia-
monds can buy stones from diamond trad-
ers and pay for storage and insurance, or The Mellon Blue Diamond
buy shares in diamond companies. The (9.75 carats) set a new
Singapore Diamond Investment Exchange world auction record for
and Los Angeles-based Investment Dia- the carat price of a blue
mond Exchange partner with banks offer- diamond, fetching $32.6m
at Sothebys New York in
ing private clients purchasing, valuation November 2014
and certification services.
Asset management firms including
Diamond Capital Fund sell shares in stores
The Graff Vivid Yellow (100.9
of physical diamonds. Sciens Colored carats) marked a world auction
Diamond Fund, owned by UHNWI John record for a yellow diamond
Rigas, invests in red, pink, blue, green, or- when it sold for $16.3m at
There is nothing quite like holding a the most transportable form of wealth ange and yellow diamonds sourced from The Graff Vivid Yellow, Sothebys Sothebys Geneva in May 2014
30-carat D-flawless diamond in the palm in existence. mines for individuals and institutions.
of your hand. This tiny thing could assure While diamond aficionados may be Since the 1950s the price of the dia-
the financial security of a couple of genera- madly in love with the stones they buy, monds we invest in has never dropped, The Winston Blue (13.22 car-
tions of an entire family. they also regard them as a means to in- says Mahyar Makhzani, Co-Managing Di- ats) was sold to Harry Win-
ston for 21.4m Swiss francs in
Robust returns on diamonds of more creased wealth. In 2006 billionaire jewel- rector at Sciens Colored Diamond Fund. classifies the many thousands of different
May 2014
than one carat, mounting demand from ler Laurence Graff bought the 78.1-carat Investing in diamonds poses chal- qualities of diamonds, which incorporate a
Asia and the prospect of mines running Maharajah diamond. It had not been seen lenges. Unlike gold, diamonds are not fun- spectrum well beyond the traditional four
dry are pointing to the increased attrac- in 50 years because it had been in a bank gible one carat is not equal to another Cs of cut, carat, colour and clarity, while
The Blue Moon (29.6 carats)
tiveness of precious natural diamonds as vault. The translucency, the life in that carat. Although the internet has brought also offering easy access to individuals be- was acquired by Cora Inter-
an investment asset. Global diamond sup- stone, is beyond anything I have ever about increased pricing transparency, yond the diamond industry. national LLC for $25.6m from
ply is expected to plateau by 2020 and drop seen, Mr Graff said at the time. The next there is no standardised pricing index that Monaco-based diamond expert Ehud Petra Diamonds in February
off significantly in the following decade, day, he sold it for an undisclosed profit. Arye Laniado believes increased trans- 2014
according to mining giant De Beers. Fancy colour diamonds (a technical parency will prove transformative. A
The Fancy Color Diamond Price Index
Since 2009 the price of polished dia- term in the industry for stones of excep- fully transparent pricing system will un-
(Jan 2005 to Oct 2014)
monds measuring one carat or more has tional colour), which are far rarer than lock an opportunity for savvy consumers The Graff Pink (24.78 carats)
risen 5%, says Ari Epstein, CEO of Antwerp white diamonds, are performing particu- to view diamonds as a store of wealth in achieved $46.2m at Sothebys
Geneva in November 2010,
World Diamond Centre. larly strongly. The 9.75-carat Mellon Blue ways not yet possible, ushering in a new the auction record for any
era in which informed buyers will be able diamond or jewel
to make confident purchasing decisions,
says Mr Laniado, the principal of Mercury
360% Blue Diamond, which advised Cora Interna- The blue diamond Bulgari
tional, a New York jeweller specialising in Trombino ring (5.30 carats)
The concept of diamonds as a store of rare diamonds, on acquiring the 29.6-carat fetched 6.2m at Bonhams
wealth is not new. Diamonds are arguably the 161% Pink
Blue Moon for $25.6 million. in April 2013
London-based, Russian-born jewellery
most transportable form of wealth in existence designer Yana Zaikin, founder of Emily H
London, has noticed her UHNWI clients
increasingly hedging their bets on top-
56% Yellow
quality diamonds, while adorning them-
selves in the meantime.
Bruce Cleaver, Executive Head of Stra- set a new world auction record for the carat Five years ago my clients preferred
tegy at De Beers, now anticipates a rise in price of a blue diamond when it made investing in gold rather than wear-
diamond prices. With growth in diamond $32.6m at Sothebys New York in Novem- able diamond jewels, says Mrs Zaikin.
Overall price change
demand expected to outstrip growth in ber 2014. With currency fluctuations, theyre now

167 %
supply, there are different possible out- Most sales, however, do not take place diversifying with diamonds. Some keep
comes, but we believe higher diamond at auction, so tracking the change in price jewels in the safe, but most wear them.
prices would account for a significant has been difficult. But a new index created One bought three identical brilliant stones
amount of the gap, he says. by The Fancy Color Research Foundation, for three rings, which they keep in each of
The concept of diamonds as a store of which records deals at all stages of the their homes, in Palm Beach, London and
wealth is not new. Diamonds are arguably chain, offers more transparency. Source: Fancy Color Research Foundation New York.
databank 66 67 the wealth report 2015

Regional wealth distribution Global wealth distribution

Millionaire populations % change UHNWI populations % change Centa-millionaire populations % change Billionaire populations % change

2004- 2013- 2014- 2004- 2013- 2014- 2004- 2013- 2014- 2004- 2013- 2014-
Region 2004 2013 2014 2024 2014 2014 2024 Country Region 2004 2013 2014 2024 2014 2014 2024 2004 2013 2014 2024 2014 2014 2024 2004 2013 2014 2024 2014 2014 2024
Africa 76,385 164,000 168,815 257,519 121% 3% 53% Algeria Africa 14 35 36 51 157% 3% 42% 2 4 4 6 100% 0% 50% - 1 1 1 - 0% 0%
Asia 2,718,770 4,933,277 5,094,277 7,373,427 87% 3% 45% Angola Africa 12 70 72 112 500% 3% 56% 3 17 17 26 467% 0% 53% - 1 1 2 - 0% 100%
Australasia 144,252 350,500 357,006 440,015 147% 2% 23% Argentina Latin America 139 483 480 944 245% -1% 97% 37 128 127 248 243% -1% 95% 2 7 7 13 250.0% 0% 86%
Europe 3,714,946 5,015,797 5,152,132 6,298,363 39% 3% 22% Australia Australasia 1,001 2,740 2,785 3,553 178% 2% 28% 216 585 595 756 175% 2% 27% 11 30 30 38 172.7% 0% 27%
Austria Europe 953 1,429 1,460 1,874 53% 2% 28% 129 193 197 252 53% 2% 28% 6 9 9 11 50.0% 0% 22%
Russia/CIS 47,714 195,226 197,625 293,390 314% 1% 48%
Azerbaijan Russia / CIS 19 62 64 107 237% 3% 67% 2 6 6 10 200% 0% 67% 1 - - - - - -
Latin America 240,017 580,700 593,560 866,146 147% 2% 46%
Bahrain Middle East 69 124 126 161 83% 2% 28% 7 12 12 15 71% 0% 25% - - - - - - -
Middle East 204,944 426,100 438,583 605,438 114% 3% 38% Bangladesh Asia 38 75 78 113 105% 4% 45% 4 8 8 12 100% 0% 50% - - - - - - -
North America 4,370,348 5,653,100 5,806,833 7,128,478 33% 3% 23% Belgium Europe 955 1,370 1,402 1,771 47% 2% 26% 117 167 171 215 46% 2% 26% 1 1 1 1 0.0% 0% 0%
World 11,517,376 17,318,700 17,808,831 23,262,776 55% 3% 31% Botswana Africa 12 20 20 26 67% 0% 30% 1 2 2 3 100% 0% 50%- - - -
Brazil Latin America 1,146 4,122 4,218 6,278 268% 2% 49% 170 602 616 911 262% 2% 48% 12 43 44 65 266.7% 2% 48%
Bulgaria Europe 16 42 43 69 169% 2% 60% 2 4 4 6 100% 0% 50% - - - - - - -
UHNWI (+US$30m) populations % change Cambodia Asia 20 52 54 84 170% 4% 56% 6 15 16 25 167% 7% 56% - - - - - - -
Canada North America 2,275 4,248 4,341 5,392 91% 2% 24% 381 705 720 891 89% 2% 24% 20 37 38 47 90.0% 3% 24%
2004- 2013- 2014- Chile Latin America 219 664 687 1,122 214% 3% 63% 76 226 234 379 208% 4% 62% 5 15 16 26 220.0% 7% 63%
Region 2004 2013 2014 2024 2014 2014 2024 China Asia 1,721 7,905 8,366 15,681 386% 6% 87% 582 2,639 2,790 5,185 379% 6% 86% 39 174 184 338 371.8% 6% 84%
Colombia Latin America 131 435 446 606 240% 3% 36% 23 74 76 103 230% 3% 36% 1 2 2 3 100.0% 0% 50%
Africa 824 1,868 1,932 3,074 135% 3% 59% Croatia Europe 130 220 221 303 70% 0% 37% 13 22 22 30 69% 0% 36% - - - - - - -
Asia 22,335 40,853 42,272 62,399 89% 3% 48% Cyprus Europe 128 182 181 228 41% -1% 26% 27 38 38 48 41% 0% 26% 1 1 1 1 0.0% 0% 0%
Australasia 1,594 3,828 3,920 4,834 146% 2% 23% Czech Republic Europe 200 391 399 548 100% 2% 37% 41 79 81 111 98% 3% 37% 2 4 4 5 100.0% 0% 25%
Europe 42,409 58,731 60,565 75,945 43% 3% 25% Denmark Europe 709 981 1,019 1,288 44% 4% 26% 115 158 164 207 43% 4% 26% 4 6 6 8 50.0% 0% 33%
Russia/CIS 481 2,034 2,068 3,327 330% 2% 61% Egypt Africa 101 270 276 387 173% 2% 40% 37 97 99 138 168% 2% 39% 3 7 7 10 133.3% 0% 43%
Latin America 3,798 9,677 9,902 14,837 161% 2% 50% Estonia Europe 16 36 37 60 131% 3% 62% 2 4 4 6 100% 0% 50% - - - - - - -
Middle East 3,296 7,052 7,269 10,198 121% 3% 40% Ethiopia Africa 9 35 36 72 300% 3% 100% 1 4 4 8 300% 0% 100% - - - - - - -
Finland Europe 288 416 426 544 48% 2% 28% 36 52 53 67 47% 2% 26% 1 1 1 1 0.0% 0% 0%
North America 32,778 43,626 44,922 56,159 37% 3% 25%
France Europe 2,774 3,800 3,865 4,424 39% 2% 14% 431 588 598 683 39% 2% 14% 28 38 39 44 39.3% 3% 13%
World 107,515 167,669 172,850 230,773 61% 3% 34% Germany Europe 8,126 11,392 11,679 14,481 44% 3% 24% 1,813 2,529 2,591 3,201 43% 2% 24% 49 68 70 86 42.9% 3% 23%
Ghana Africa 7 30 31 62 343% 3% 100% 1 3 3 6 200% 0% 100% - - - - - - -
Greece Europe 573 721 717 907 25% -1% 26% 74 92 92 116 24% 0% 26% 2 3 3 4 50.0% 0% 33%
Centa-millionaire populations % change Hong Kong Asia 1,706 2,560 2,690 3,941 58% 5% 47% 404 603 633 922 57% 5% 46% 34 51 53 77 55.9% 4% 45%
India Asia 622 1,576 1,652 3,371 166% 5% 104% 153 383 401 811 162% 5% 102% 26 65 68 136 161.5% 5% 100%
2004- 2013- 2014- Indonesia Asia 195 626 650 1,507 233% 4% 132% 58 185 192 441 231% 4% 130% 7 23 24 54 242.9% 4% 125%
Region 2004 2013 2014 2024 2014 2014 2024 Iran Middle East 68 217 229 403 237% 6% 76% 7 22 23 40 229% 5% 74% - - - - - - -
Iraq Middle East 45 130 133 229 196% 2% 72% 4 13 13 22 225% 0% 69% - - - - - - -
Africa 229 509 524 815 129% 3% 56%
Ireland Europe 714 811 825 983 16% 2% 19% 107 121 123 146 15% 2% 19% 3 3 3 4 0.0% 0% 33%
Asia 4,149 8,744 9,094 14,263 119% 4% 57% Israel Middle East 800 1,437 1,485 1,880 86% 3% 27% 110 197 203 256 85% 3% 26% 9 16 17 21 88.9% 6% 24%
Australasia 294 727 744 924 153% 2% 24% Italy Europe 2,936 3,650 3,717 4,468 27% 2% 20% 481 595 606 726 26% 2% 20% 21 26 26 31 23.8% 0% 19%
Europe 8,006 10,917 11,261 14,027 41% 3% 25% Ivory Coast Africa 16 25 26 57 63% 4% 119% 2 3 3 6 50% 0% 100% - - - - - - -
Russia/CIS 216 915 926 1,447 329% 1% 56% Japan Asia 12,186 16,450 16,703 19,916 37% 2% 19% 1,425 1,915 1,944 2,311 36% 2% 19% 19 26 26 31 36.8% 0% 19%
Latin America 590 1,625 1,663 2,549 182% 2% 53% Jordan Middle East 38 94 96 140 153% 2% 46% 8 19 19 28 138% 0% 47% - - - - - - -
Middle East 705 1,508 1,550 2,167 120% 3% 40% Kazakhstan Russia / CIS 33 179 190 407 476% 6% 114% 11 58 61 129 455% 5% 111% 1 7 7 15 600.0% 0% 114%
North America 9,289 12,159 12,518 15,597 35% 3% 25% Kenya Africa 56 110 115 209 105% 5% 82% 16 31 32 58 100% 3% 81% - 1 1 2 - 0% 100%
World 23,478 37,103 38,280 51,789 63% 3% 35% Kuwait Middle East 203 515 513 760 153% 0% 48% 45 112 112 165 149% 0% 47% 2 6 6 9 200.0% 0% 50%
Latvia Europe 28 68 69 125 146% 1% 81% 3 7 7 13 133% 0% 86% - - - - - - -
Lebanon Middle East 167 306 308 407 84% 1% 32% 45 81 82 108 82% 1% 32% 2 3 3 4 50.0% 0% 33%
Libya Africa 16 45 42 66 163% -7% 57% 2 5 5 8 150% 0% 60% - - - - - - -
Billionaire populations % change Lithuania Europe 39 83 86 155 121% 4% 80% 4 8 8 14 100% 0% 75% 0 1 1 2 - 0% 100%
Luxembourg Europe 354 580 599 803 69% 3% 34% 97 158 163 218 68% 3% 34% 1 1 1 1 0.0% 0% 0%
2004- 2013- 2014- Malaysia Asia 242 557 572 814 136% 3% 42% 90 206 211 299 134% 2% 42% 6 14 14 20 133.3% 0% 43%
Region 2004 2013 2014 2024 2014 2014 2024 Mexico Latin America 1,687 2,540 2,596 3,526 54% 2% 36% 168 252 257 347 53% 2% 35% 14 21 21 28 50.0% 0% 33%
Monaco Europe 129 198 217 426 68% 10% 96% 13 20 22 43 69% 10% 95% 2 11 12 23 500.0% 9% 92%
Africa 11 30 30 48 172.7% 0% 60%
Mongolia Asia 8 45 48 101 500% 7% 110% 1 5 5 10 400% 0% 100% - - - - - - -
Asia 194 472 492 834 153.6% 4% 70%
Morocco Africa 23 40 41 64 78% 3% 56% 20 34 35 54 75% 3% 54% 2 4 4 6 100.0% 0% 50%
Australasia 13 33 33 41 153.8% 0% 24% Mozambique Africa 4 10 10 19 150% 0% 90% 0 1 1 2 - 0% 100% - - - - - - -
Europe 268 383 393 490 46.6% 3% 25% Myanmar Asia 14 40 42 85 200% 5% 102% 1 4 4 8 300% 0% 100% - - - - - - -
Russia/CIS 31 135 136 203 338.7% 1% 49% Namibia Africa 7 16 17 23 143% 6% 35% 1 2 2 3 100% 0% 50% - - - - - - -
Latin America 39 103 105 159 169.2% 2% 51% Netherlands Europe 2,020 2,735 2,826 3,531 40% 3% 25% 300 404 417 519 39% 3% 24% 3 4 4 5 33.3% 0% 25%
Middle East 46 98 102 138 121.7% 4% 35% New Zealand Australasia 577 1,050 1,094 1,229 90% 4% 12% 75 135 141 158 88% 4% 12% 2 3 3 3 50.0% 0% 0%
North America 412 537 553 685 34.2% 3% 24% Nigeria Africa 63 200 210 399 233% 5% 90% 19 60 63 119 232% 5% 89% 2 7 7 13 250.0% 0% 86%
World 1,014 1,791 1,844 2,598 81.9% 3% 41% Norway Europe 1,238 2,425 2,521 3,501 104% 4% 39% 167 323 336 464 101% 4% 38% 5 9 9 12 80.0% 0% 33%
Oman Middle East 51 135 137 195 169% 1% 42% 5 14 14 20 180% 0% 43% - 1 1 1 - 0% 0%
Pakistan Asia 112 260 267 400 138% 3% 50% 11 26 27 40 145% 4% 48% - - - - - - -
*Africa includes Egypt Panama Latin America 41 98 103 154 151% 5% 50% 4 10 11 16 175% 10% 45% - - - - - - -
*Europe excludes Russia and CIS countries Paraguay Latin America 49 159 165 267 237% 4% 62% 5 16 17 27 240% 6% 59% - - - - - - -
*Middle East includes Turkey Peru Latin America 96 276 283 451 195% 3% 59% 38 108 111 176 192% 3% 59% 3 9 9 14 200.0% 0% 56%
Philippines Asia 68 171 177 295 160% 4% 67% 59 147 152 252 158% 3% 66% 6 15 16 26 166.7% 7% 63%
*Latin America includes the Caribbean and Mexico
Poland Europe 222 487 503 683 127% 3% 36% 33 71 73 99 121% 3% 36% 2 5 5 7 150.0% 0% 40%
Portugal Europe 485 625 634 781 31% 1% 23% 80 103 104 128 30% 1% 23% 2 3 3 4 50.0% 0% 33%
Qatar Middle East 114 286 296 452 160% 4% 53% 24 59 61 93 154% 3% 52% - 1 1 2 - 0% 100%
Source: WealthInsight Romania Europe 61 172 177 297 190% 3% 68% 17 47 48 80 182% 2% 67% 1 2 2 3 100.0% 0% 50%
Russia Russia / CIS 279 1,292 1,303 1,899 367% 1% 46% 139 634 639 926 360% 1% 45% 26 116 117 168 350.0% 1% 44%
Saudi Arabia Middle East 382 851 874 1,212 129% 3% 39% 156 345 354 488 127% 3% 38% 10 22 23 31 130.0% 5% 35%

The numbers
Singapore Asia 1,471 3,154 3,227 4,979 119% 2% 54% 354 751 768 1,177 117% 2% 53% 11 23 24 36 118.2% 4% 50%
The wealth distribution data, provided South Africa Africa 300 594 616 903 105% 4% 47% 86 168 174 254 102% 4% 46% 4 8 8 12 100.0% 0% 50%
South Korea Asia 946 1,565 1,622 2,184 71% 4% 35% 236 387 401 537 70% 4% 34% 17 27 28 37 64.7% 4% 32%
by WealthInsight, includes historic, cur-
behind the trends rent and 10-year predictions for UHNWI,
Spain
Sri Lanka
Sudan
Europe
Asia
Africa
2,556
21
3
3,475
61
8
3,538
63
8
4,392
103
12
38%
200%
167%
2%
3%
0%
24%
63%
50%
398
6
0
538
16
1
548
17
1
678
28
1
38%
183%
-
2%
6%
0%
24%
65%
0%
16
-
-
22
-
-
22
-
-
27
-
-
37.5%
-
-
0%
-
-
23%
-
-
centa-millionaire and billionaire popula- Sweden Europe 2,033 3,147 3,245 4,327 60% 3% 33% 263 405 417 553 59% 3% 33% 6 10 10 13 66.7% 0% 30%
Comprehensive wealth distribution data tions in almost 100 countries. Regional Switzerland Europe 2,479 4,137 4,328 5,295 75% 5% 22% 479 793 829 1,011 73% 5% 22% 45 74 77 93 71.1% 4% 21%
and regional Attitudes Survey results millionaire population data is included, Syria Middle East 85 203 211 321 148% 4% 52% 9 20 21 32 133% 5% 52% - - - - - - -
Taiwan Asia 933 1,503 1,570 2,148 68% 4% 37% 275 440 459 625 67% 4% 36% 22 35 36 49 63.6% 3% 36%
but is also available on request at a coun- Tanzania Africa 40 75 78 156 95% 4% 100% 4 8 8 16 100% 0% 100% - - - - - - -
Thailand Asia 218 527 540 855 148% 2% 58% 85 203 208 327 145% 2% 57% 7 17 17 26 142.9% 0% 53%
By its very nature, a printed publication try level. City wealth numbers for over 100 Tunisia Africa 37 55 57 88 54% 4% 54% 4 6 6 9 50% 0% 50% - - - - - - -
such as The Wealth Report can only hope locations can also be requested. Turkey Middle East 866 1,923 1,986 2,881 129% 3% 45% 214 471 486 701 127% 3% 44% 16 35 36 51 125.0% 3% 42%
UAE Middle East 317 625 658 856 108% 5% 30% 43 84 88 114 105% 5% 30% 7 13 14 18 100.0% 8% 29%
to describe and analyse trends in any de- In terms of the 2015 Attitudes Survey Uganda Africa 9 20 21 35 133% 5% 67% 5 12 12 20 140% 0% 67% - 1 1 2 - 0% 100%
tail at a fairly broad macro level. However, (pp815), we have included the results UK Europe 8,431 10,149 10,547 13,176 25% 4% 25% 2,004 2,405 2,498 3,109 25% 4% 24% 65 78 81 100 24.6% 4% 23%
Ukraine Russia / CIS 93 339 343 592 269% 1% 73% 49 174 176 301 259% 1% 71% 3 12 12 20 300.0% 0% 67%
over the following pages we have included at a regional level for the majority of the Uruguay Latin America 28 108 114 186 307% 6% 63% 3 11 12 19 300% 9% 58% - - - - - - -
two highly granular datasets that provide surveys findings, but further data for USA North America 30,503 39,378 40,581 50,767 33% 3% 25% 8,908 11,454 11,798 14,706 32% 3% 25% 392 500 515 638 31.4% 3% 24%
Uzbekistan Russia / CIS 29 82 86 172 197% 5% 100% 3 8 8 16 167% 0% 100% - - - - - - -
a huge amount of information for those selected countries is also available for Venezuela Latin America 47 200 192 413 309% -4% 115% 12 50 48 102 300% -4% 113% 1 3 3 6 200.0% 0% 100%
interested in global wealth distribution those wanting to delve deeper. To take Vietnam Asia 35 110 116 300 231% 5% 159% 7 21 22 56 214% 5% 155% - 1 1 3 - 0% 200%
Zambia Africa 4 15 16 29 300% 7% 81% 1 2 2 4 100% 0% 100% - - - - - - -
and the results of the reports annual part in next years survey please contact: Zimbabwe Africa 14 25 26 38 86% 4% 46% 2 3 3 4 50% 0% 33% - - - - - - -
Attitudes Survey. [email protected]
databank 68 69 the wealth report 2015

Attitudes Survey 2015 What percentage of your clients do you think are considering purchasing another home in the next 12 months?
Wealth and lifestyle trends Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

23% 22% 15% 24% 28% 36% 31% 21% 26%

What percentage of your clients are concerned about the following issues regarding their wealth, business or lifestyle?
Are your clients becoming more interested in the following types of homes? (Percentage = respondents who said yes)
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

Family/business succession issues 96% 72% 83% 86% 89% 92% 92% 100% 85% Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Potential increase in wealth taxes 100% 78% 61% 90% 77% 58% 82% 75% 81% Ski property 0% 12% 17% 35% 26% 28% 64% 11% 34%
Increased scrutiny of wealthy by government 82% 76% 44% 88% 85% 73% 75% 100% 80% Vineyard 25% 27% 17% 26% 19% 4% 30% 38% 25%
Cyber-crime and online privacy 78% 75% 69% 72% 65% 65% 92% 75% 76% Equestrian property 29% 12% 12% 17% 13% 28% 20% 13% 17%
Political interference 86% 76% 35% 69% 76% 81% 55% 89% 68%
Health/environmental issues 54% 71% 60% 57% 75% 38% 82% 38% 66%
What percentage of your clients do you think are considering permanently changing their domicile or country of residence?
Crisis in Middle East 31% 35% 38% 48% 38% 96% 64% 29% 51%
Political situation in Russia/Ukraine 19% 34% 47% 52% 38% 38% 73% 100% 51% Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Chinas potential economic slowdown 30% 71% 67% 31% 37% 35% 64% 0% 49%
11% 12% 4% 14% 15% 10% 7% 33% 12%

How do you expect your clients philanthropic activities to change in 2015 compared with 2014?
Are the following factors reasons why your clients might want to move? (Percentage = respondents who said yes)
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Decrease 4% 5% 6% 2% 2% 0% 0% 22% 2%
Tax 57% 68% 56% 81% 83% 54% 91% 56% 77%
Increase 36% 22% 17% 17% 29% 31% 25% 33% 22%
Quality of life/health 74% 79% 33% 65% 60% 71% 45% 100% 63%
Remain the same 61% 73% 77% 81% 69% 69% 75% 44% 75%
Business reasons 43% 66% 51% 62% 53% 40% 36% 63% 54%
Education of children 71% 75% 24% 44% 49% 60% 27% 89% 49%
Are your younger clients more philanthropic than their parents generation? Security 93% 71% 19% 51% 60% 69% 9% 63% 47%
Political issues 86% 57% 9% 50% 43% 73% 0% 88% 40%
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global Lack of civil liberties 25% 38% 0% 11% 12% 28% 0% 57% 16%
Yes 36% 39% 22% 34% 46% 31% 75% 11% 45%
No 64% 61% 78% 66% 54% 69% 25% 89% 55%

Property Investments
How do you expect your clients spending on luxury goods to change in 2015 compared with 2014?

Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global On average, what percentage of your clients investment portfolios is allocated to property?
Decrease 4% 16% 3% 9% 6% 4% 0% 22% 8%
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Increase 39% 31% 14% 24% 35% 40% 33% 22% 30%
Remain the same 57% 53% 83% 66% 59% 56% 67% 56% 62% Average 31% 38% 42% 33% 26% 40% 24% 27% 32%

Do your younger clients spend more on luxury goods than their parents generation? How did that allocation change in 2014?

Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

Less 25% 13% 9% 10% 7% 0% 8% 0% 9% Remained the same 64% 67% 70% 57% 66% 38% 40% 63% 55%
More 64% 61% 77% 74% 75% 84% 50% 89% 66% Increased 29% 22% 15% 36% 28% 62% 50% 25% 37%
The same 11% 26% 14% 17% 19% 16% 42% 11% 25% Decreased 7% 11% 15% 7% 6% 0% 10% 13% 8%

Are your clients increasingly using private jets for their business and leisure travel? How do you think it will change in 2015?

Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

Yes 18% 38% 18% 27% 22% 31% 25% 33% 29% Remain the same 57% 53% 80% 61% 53% 46% 45% 78% 54%
No 82% 62% 82% 73% 78% 69% 75% 67% 71% Increase 32% 27% 9% 33% 39% 46% 45% 11% 35%
Decrease 11% 20% 11% 6% 8% 8% 9% 11% 10%

What percentage of your clients send, or are likely to send, their children overseas for their education?
Are your clients becoming more interested in the following property investments? (Percentage = respondents who said yes)
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
Secondary school 19% 38% 4% 19% 35% 36% 23% 61% 27%
University 40% 62% 14% 34% 58% 70% 41% 70% 47% Residential for investment 100% 84% 69% 82% 77% 85% 75% 100% 81%
Offices 63% 68% 29% 43% 57% 76% 70% 63% 59%
Retail/shops 43% 59% 15% 31% 48% 63% 55% 50% 47%
Are your clients sending their children overseas for their education at a younger age? Hotels 22% 34% 21% 39% 28% 64% 33% 43% 37%
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global Infrastructure 30% 21% 46% 35% 40% 32% 56% 50% 37%
Agricultural 29% 27% 56% 43% 40% 8% 44% 50% 37%
Yes 32% 67% 13% 32% 44% 65% 27% 67% 42%
Warehousing/industrial 54% 33% 51% 28% 36% 33% 30% 17% 31%
No 68% 33% 87% 68% 56% 35% 73% 33% 58%

Where are your clients most likely to invest in property?

Prime residential property
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

Abroad 39% 38% 6% 45% 57% 77% 27% 89% 42%

On average, what percentage of your clients total net worth is accounted for by their main residence and any second homes that are held not purely as an investment? In their own country 61% 63% 94% 55% 44% 23% 73% 11% 58%

Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

21% 28% 29% 23% 20% 27% 19% 23% 23% Are your younger clients more interested in property as an investment than their parents generation?

Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global
On average, how many homes do your clients own? Yes 43% 43% 25% 44% 46% 44% 50% 44% 45%
No 57% 57% 75% 56% 54% 56% 50% 56% 55%
Africa Asia Australasia Europe Latin America Middle East North America Russia/CIS Global

2.5 3.3 2.3 2.6 3.0 3.8 2.9 3.0 2.9

Due to rounding, some columns may not add to 100

Luxury spending trends regional data available on request
Final word

Housing affordability
is moving up the
investment agenda

Liam Bailey
Global Head of Research
[email protected]
+44 20 7861 5133

One of the biggest trends we are monitoring across the next decade. As The Economist magazine noted
pretty much all the markets we focus on is the earlier this year, 60 million rich-world households
ongoing globalisation of demand for property. The spend more than 30% of their income on housing; in
biggest counter-trend I see at play is protectionism the emerging world 200 million households live in
(pp3839). slums. With rapid urbanisation, these numbers will
Compared with other capital flows, money moving only grow.
into residential property often attracts controversy. Opportunities for investors in this area are
New demand is accused of hiking prices, as well as enormous. Innovations in housing design, funding,
creating market access and affordability issues for land assembly and construction are developing
local residents. rapidly. And this is an area where the flow of ideas
The counterargument, that new investment flows and experience is moving both ways, between
lead to new supply in precisely the places where developed and emerging economies.
demand is highest, appears to be falling on deaf ears. We are already working with a number of develop-
As a result, taxes on expensive homes and property ers who are assessing every stage of the development
investments are being extended. process to see how they can design and deliver better
This renewed focus on the impact of wealth on homes, more cheaply and more rapidly.
world property markets is to some extent misplaced. In my view, this area will become an increasingly
Not because affordability and accessibility issues are dominant area of focus for our clients. As challenges
overstated, but rather because, by focusing solely on and opportunities come, they dont get much bigger,
demand, the arguments are too narrowly drawn. or more important.
Access to high-quality, truly affordable housing Please contact me if you would like to discuss this
is set to be a dominant political theme globally for or any of the issues raised in this years report.

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