Global Perspective on Prime Property & Wealth 2012

A very interesting report issued by Citi Private Bank and Knight Frank on Mar 28, 2012.

I suggest you read this carefully since this shows important future global trends on where to invest?.

https://www.privatebank.citibank.com/pdf/wealthReport2012_lowRes.pdf

Some key take aways from the report are:

- There are now 63,000 people worldwide with $100m or more in assets, according to Ledbury Research, which specialises in monitoring global wealth trends.

- There are now 18,000 centa-millionaires in the region covering South-East Asia, China and Japan.This is more than North America, which has 17,000, and Western Europe with 14,000.

- By 2016, Ledbury Research expects that this region will have extended its lead, with 26,000 centamillionaires, compared with 21,000 in North America and 15,000 in Western Europe.

- The London School of Economics professor Danny Quah forecasts that by 2050 the world's economic centre of gravity, a theoretical measure of the focal point of global economic activity based on GDP, will have shifted eastwards to lie somewhere between China and India (see map, p8). Professor Quah calculated that in 1980 it was in the middle of the Atlantic.

- It is estimated that by 2050, India will be the largest economy in the world at USD 85.97 USD trillion GDP at PPP - Purchasing Power Parity.

- In 2010, USA was at USD 14.12t of GDP, China at USD 9.98t, Japan at 4.33t and India at 3.92t. All data in PPP for GDP.

- In 2050, composition will be India at USD 85.97t of GDP China at USD 80.02t, US at USD 39.07t and Indonesia at USD 13.93t. All data in PPP.

- In terms of important cities, Dubai is at 8th standing in growing importance, behind Beijing and Shanghai at the top, as well as London and Singapore and Sao Paulo ahead of it. But the fact that Dubai appears today as important is remarkable. And despite Dubai's troubles in the recent past, it has been voted the 13th Most Important City in the World today!

MOST IMPORTANT NOW
1 London
2 New York
3 Hong Kong
4 Paris
5 Singapore
6 Miami
7 Geneva
8 Shanghai
9 Beijing
10 Berlin

MOST IMPORTANT IN 10 YEARS
1 London
2 New York
3 Beijing
4 Shanghai
5 Singapore
6 Hong Kong
7 Paris
8 Sao Paulo
9 Geneva
10 Berlin

GROWING IN IMPORTANCE TO HNWIs THE FASTEST
1 Beijing
2 Shanghai
3 London
4 Singapore
5 Hong Kong
6 New York
7 Sao Paulo
8 Dubai
9 Mumbai
10 Paris

- The average real estate price rise in 2011 was highest in Kenya, Miami and Bali. While real estate prices declined most in Mumbai (worst) along with Mallorca and Milan.

- Price falls in Singapore, Sydney and Shanghai – tellingly among the fastest growers in last year's PIRI survey – confirm the unravelling of speculative price booms in Asia Pacific.

- WHAT ARE THE FUTURE SUPER PRIME MARKETS?

There is certain to be an expansion of the list of superprime markets – the growth of global wealth will ensure that – but I don't expect a rapid rise in the numbers. Take a look at the list of current locations and they share
one fundamental benefit – these are mature markets with depth of liquidity, where owners can almost dictate the timing of their exit.

In 2009, $41.6bn of private money was invested globally in commercial property, according to Real Capital Analytics. This jumped to $57.4bn in 2010, and rose to $70.6bn in 2011. This is quite remarkable considering the fall in investment seen by some other asset classes in 2011, as investors responded to mounting uncertainty in the global economy.

A popular saying, which we often hear repeated by investors from the Middle East, is: "Property may get sick, but it never dies." That sums up the thinking of many wealthy individuals who are targeting property today.

- How do you view property as an investment class and what sectors have you invested, or are considering investing, in?

I think trophy assets are probably the most resilient and successful investment options at the moment, and will be for the foreseeable future.

- Why are the wealthy increasingly turning to commercial property as a safe investment?

Prime office and retail buildings in perceived safe-haven locations like London can offer annual yields that are as reliable as government bonds, but with the upside of potential capital growth.

- Why are wealthy individuals choosing to invest in art, wine and sport?

At a time of turmoil in the markets, art, wine and sport look like steady investments, routinely outperforming indices such as the FTSE 100. And if times get really hard, investments of passion can still be enjoyed.

- The charts on Page 60 and 61 for performance of real estate prices in various cities globally and select commodities over past 5 years are very interesting.

- On Page 63, it is noticed that Dubai is No. 10 globally for Quality of Life ahead of Monaco and Vancouver or Toronto and Madrid! While for Economic Activity it rises to No. 7 globally, ahead of powerful cities like Frankfurt, Berlin or Bangkok. Overall, Dubai is No. 13 globally.

If you require any help, to purchase luxury real estate (residential, commercial or income generating hotels) anywhere in the world or need any investment ideas to bounce off, please do not hesitate to contact me.

Stay tuned...

Citigroup Study Shows Asian Rich Topping North American

By Sanat Vallikappen - Mar 28, 2012 8:24 AM GMT+0400