Knight Frank and Citi Private Bank launch The Wealth Report 2010
Date : 23 March 2010
The 2010 edition of The Wealth Report is the fourth such collaboration between Knight Frank and Citi Private Bank.
It includes unique insight into the following topics:
- The performance of prime global residential property
- The cities that really matter to the world's wealthy
- The attitude of the wealthy towards property and other investments
- A detailed focus on prime property markets in Asia Pacific
Key highlights:
- The latest results from the Knight Frank Prime International Residential Index (PIRI) show that luxury house prices fell on an annual basis in almost 75% of the locations tracked by the index in 2009
- Key Asian cities, however, showed exceptional growth (Shanghai +52%, Hong Kong +40.5%), while other prime city locations also saw an improvement in performance (London +6.1%, Washington DC +5.6%)
- London has surrendered its ranking as the world’s top city to New York, according to the latest Knight Frank World Cities Survey
- Government intervention following the global credit crisis means capital cities such as Washington DC and Beijing are becoming increasingly important financial centres
- Property accounts for one-third of the investment portfolios of wealthy investors, according to The Wealth Report 2010 Attitudes Survey. Over 70% believe 2010 will be a good year to invest in property, with half predicting residential property will be the sector’s top performer
- When making investment decisions, the majority of wealth investors rely on their own expertise. Most do not expect their wealth to increase significantly in 2010, but only 4% expect it to decline
- Prime property can offer the wealthy an entirely new way of life, as well as just a new home, according to an exclusive interview with Trudie Styler
- The market for contemporary art is booming again as buyers from the world’s new economies flex their muscles
Liam Bailey, head of residential research, Knight Frank, commented:
“The Wealth Report 2010 reveals that the global market for prime residential property polarised during 2009. While some Asian cities saw phenomenal growth as China recovered strongly from the global recession, most locations around the world recorded price falls. The hardest hit were those such as Dubai and Dublin that really soared during the height of the property boom that preceded the credit crunch.
“I do believe, however, that we will see this gap narrow again in 2010. It seems unlikely that property prices in cities such as Shanghai can continue to grow at these kind of rates, and in many locations there was positive growth in the latter half of 2009. In New York, for example, prices rose 2% in the second half of the year, despite an annual slide of over 12%. It is also worth noting that Hong Kong, one of this year’s strongest performers, was one of last year’s weakest.
“Without doubt, the global recession has had a huge impact on prime property markets, but some of the changes have been more subtle than the headlines might suggest. The fiscal intervention by the administrations in Beijing and Washington DC means that these cities are now viewed as financial as well as administrative hubs. This is already having an impact on each city’s prime property market as more banks gravitate towards them.
“Government intervention, however, does not always have a positive impact on a city’s desirability. Even though prime property prices increased strongly in London last year, the city surrendered it position at the top of the Knight Frank Global Cities Survey, which ranks cities according to various factors of importance to the world’s wealthy. London’s reputation has undoubtedly suffered in light of new UK tax legislation and the government’s attack on City bonuses.
“Although there are still questions over the state of the global economy, property remains a core part of the wealthy’s investment portfolios. It accounts for one third of their investments and the majority expect it to grow in value this year. Current price falls will be viewed by many as a buying opportunity, but as the data from our Prime International Residential Index shows, these windows of opportunity do not always remain open for long.”
David Poole, head of Citi Private Bank, UK commented:
"The impact of the financial crash has not been as hard on the typical ultra-high-net worth buyer of prime property. This means that many wealthy owners of property are again looking for investments. Our clients look for opportunities when everyone else is circling the wagons. Buying becomes opportunistic in a downturn, particularly as people turn to hard assets such as property when other assets experience dislocation.”
"How to buy has never been more sophisticated. There is a myriad of direct property investment options, funds and listed and unlisted companies, as well as more complicated instruments, such as derivatives, now on offer. This allows investors to build up a portfolio spread over asset classes and sectors, as well as risk and reward.”
Visit: www.knightfrank.com/wealthreport to read each article or download the entire report.
For further information, please contact:
Niki Riley, Knight Frank press office, +44 (0)20 7861 5037, +44(0)7795 953672,
Citi Private Bank
Adam Castellani +44 (0)20 7986 5608
Pauline Loohuis +41 58 750 7566
Ends
Notes to Editors
The Wealth Report 2010 is the fourth collaboration between Knight Frank and Citi Private Bank, market leaders in high-value property consultancy and wealth management, respectively. In the report, our expertise in the property and financial sectors has been combined to provide insight into the wealthy and their relationship with the prime property sector.
The report provides a comprehensive analysis of the prime global residential markets. We look at the importance of residential property as an asset class and report on pricing trends across the global prime residential market and look forward, with the aid of market-leading thinkers and commentators, at the big trends set to impact on property markets in the future.
The Knight Frank Prime International Residential Index (PIRI) is the only index that tracks prime residential property markets across the globe. Data is based on a selection of residential properties in prime market locations, which are valued on a structured basis, capturing changes in capital values, rents and yields. A total of 56 locations are included in this year’s index. All prices are captured in local currencies to remove the impact of currency change on our calculation and price growth.
The Wealth Report 2010 Attitudes Survey is an online survey completed by a global cross-section of Citi Private Bank’s clients and analysed by Knight Frank. Respondents are asked to consider their attitudes towards property and other investment classes.
The Knight Frank World Cities Survey assesses 40 of the world’s leading major cities based on four criteria – economic activity, political power, knowledge and influence and quality of life – to determine their overall position within the hierarchy of global cities.
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
Citi
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.
In the United Kingdom, Citibank N.A., London, and Citibank International plc, Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB are authorised and regulated by the Financial Services Authority.