World's ultra-rich hold a fifth of their wealth in real estate
The world's super rich people hold a fifth of their wealth in property, estimated at $5,328 billion, while Asia's ultra rich have a greater share in real estate, a report says.business Updated: Jan 15, 2014 14:46 IST
The world's super rich people hold a fifth of their wealth in property, estimated at $5,328 billion, while Asia's ultra rich have a greater share in real estate, a report says.
According to international real estate advisor Savills, in association with Wealth-X, property accounts for about a fifth of the invested wealth of almost 200,000 ultra high net worth individuals (UHNWIs) in the world.
Of the total private wealth of $27,770 billion, 19% is held in real estate assets amounting to $5,328 billion, it said.
Europe's super rich hold the biggest share of all privately owned real estate assets, followed by Asians.
Rich people in Europe hold 31% of their wealth in real estate assets worth $2,391 billion, followed by Asia (27% at $ 1,800 billion) and the Middle East (26% at $880 billion).
"Global real estate is mostly residential and held by occupiers, but private owners are becoming more important in the world of traded investable property," according to Yolande Barnes, head of Savills world research.
She said that since the North Atlantic debt crisis of 2008, sovereign wealth funds, wealth management companies, private banks and family offices have stepped into property deals that corporate bankers have deserted.
According to Savills, the total value of the world's real estate is now around $180 trillion, 72% of which is owner-occupied residential property.
Of the $70 trillion that is 'investable' and therefore traded regularly - including $20 trillion of commercial property - over half is being bought by private individuals, companies and organisations.
According to Mykolas D Rambus, CEO of Wealth-X, the UHNW population is expected to grow 22% by 2018 and its combined wealth - currently $27.8 trillion - is expected to total over $36 trillion by 2018.
"This presents huge opportunities for those involved in global real estate investment to create the right product in the right locations," Rambus said.
About 3% of the world's total real estate value, or $5.3 trillion, is owned by UHNWIs.
This wealthiest 0.003% of the world's population has real estate holdings which are worth an average of $ 26.5 million each, according to the report.