1、17th editionThe global perspective on prime property and editionThe global perspective on prime property and notice 2023.All rights reserved.This publication is produced for general outline information only,it is not definitive and it is not to be relied upon in any way.Although we believe that high

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8、uding Knight Frank LLP,its direct UK subsidiaries and a network of separate and independent overseas entities or practices offering property services.Together these are generally known as“the Knight Frank global network”.Each entity or practice in the Knight Frank global network is a distinct and se

9、parate legal entity.Its ownership and management is distinct from that of any other entity or practice,whether operating under the name Knight Frank or otherwise.Where applicable,references to Knight Frank include the Knight Frank global network.Knight Frank LLP is a limited liability partnership re

10、gistered in England with registered number OC305934,the registered office is 55 Baker Street,London W1U 8AN,where a list of members names may be inspected.17th editionEDITOR-IN-CHIEF Liam BaileyEXECUTIVE EDITOR Flora HarleyWRITTEN BY Knight Frank ResearchAndrew Shirley Antonia Haralambous Kate Evere

11、tt-Allen Patrick Gower Ruth Wetters Will MatthewsMARKETING Lauren HaaszPUBLIC RELATIONS Astrid RecaldinSUB-EDITING Sunny CreativeDESIGN&DIRECTION Quiddity MediaBRAND&CREATIVE CONSULTANT WinkPORTRAIT PHOTOGRAPHY Graham LeeFRONT COVER MainframePRINT OptichromeALL KNIGHT FRANK CONTACTS:Definitions and

12、dataHNWI:High-net-worth individual someone with a net worth of US$1 million or more,including their primary residence.UHNWI:Ultra-high-net-worth individual someone with a net worth of US$30 million or more,including their primary residence.PRIME PROPERTY:The most desirable and most expensive propert

13、y in a given location,generally defined as the top 5%of each market by value.Prime markets often have a significant international bias in terms of buyer profile.THE PIRI 100:Now in its 16th year,the Knight Frank Prime International Residential Index tracks movements in luxury prices across the world

14、s top residential markets.The index,compiled using data from our research teams around the world,covers major financial centres,gateway cities and second-home hotspots both coastal and rural as well as leading luxury ski resorts.THE KNIGHT FRANK WEALTH SIZING MODEL:The model,created by our data engi

15、neering team,measures the size of HNWI,UHNWI and billionaire cohorts in more than 200 countries and territories.In addition,we model the number of HNWIs and UHNWIs at city level for 100 global cities.KNIGHT FRANK HNW PULSE SURVEY:New for 2023 is our HNW Pulse Survey.This encapsulates the views of 50

16、0 HNWIs across 10 countries and territories including:Australia,Chinese mainland,France,Hong Kong SAR,Italy,Singapore,Spain,Switzerland,the UK and the US.Conducted in January 2023.THE ATTITUDES SURVEY:The 2023 instalment is based on responses provided during November 2022 by more than 500 private ba

17、nkers,wealth advisors,intermediaries and family offices who between them manage over US$2.5 trillion of wealth for UHNWI clients.Special thanks to ANZ Bank Australia,Bank of Singapore,Citi,Citibank,Commonwealth Bank,Dry Associates,Genghis Capital Ltd,Harvest Financial,HSBC Bank,ICEA LION,Ifigest,JB

18、Were,Key Capital,Komern banka,MA Financial Group,Macquarie Bank,NAB,NCBA Group,Rothschild,Santander Bank,Stanbic Bank Kenya,Standard Chartered Bank Singapore,UBS,United Overseas Bank(Malaysia)Bhd,Walsh Bay Partners and Westpac for their participation.How we chose our coverWorking alongside our creat

19、ive agency,Wink,we started with a question:what is wealth?In the past,the answer might have focused on equities,property,gold,bonds and digital assets.Increasingly,though,a broader definition that embraces the natural world forests,oceans and climate seems more appropriate.This years cover and divid

20、ers visualise many of these concepts in a digital way,showing a matrix of the diverse range of materials that represent wealth today.Attitudes SurveyHNW Pulse Survey1THE WEALTH REPORTIt is an absolute pleasure to welcome you to The Wealth Report 2023,the 17th edition of this market-leading report.In

21、 last years edition we described the surge in new wealth creation on the back of the post-Covid bounceback and its impact on asset price and market performance.The story at the heart of this years report is driven by the legacy of that economic rebound.We find ourselves in a new investment environme

22、nt.Rising inflation was the number one risk cited in The Wealth Report 2022.That led to one of the biggest rises in interest rates in history and a corresponding shift in investor behaviour.Asset prices fell back and,as we confirm in this report,overall wealth levels fell.Despite the challenges stil

23、l facing many markets,in this years report we argue that now is the time to look beyond the crisis.We believe that investor sentiment will brighten as interest rates are seen to peak.We have taken the opportunity to look forward at the themes we believe will dominate investor behaviour through this

24、year and next.RORY PENNHEAD OF LONDON RESIDENTIAL SALES&CHAIR OF PRIVATE OFFICEThis is a pivotal moment for private wealth.Despite ongoing economic headwinds,we believe that now is the time to focus on the opportunities aheadWelcome“In every major sector there is a need for better,greener and more i

25、nnovative space to meet occupier and purchaser requirements”We consider the global mobility of wealth and investments,commercial and residential real estate opportunities,the next phase of ESG,the outlook for luxury property and the lasting impact of Covid on global connectivity.We also take the pul

26、se of luxury investment markets and consider the philanthropic opportunities from rewilding.Unlike previous downturns,we did not enter the current cycle with an overhang of real estate inventory.In every major sector there is a need for better,greener and more innovative space to meet occupier and p

27、urchaser requirements.We are committed to providing you with the right advice to help you take advantage of these opportunities.Following last years expansion of our Private Office network into New York and Singapore,we are delighted to announce our latest move into Monaco which,alongside our establ

28、ished London and Dubai private client teams,means we are well placed to help you achieve your goals.Please do get in touch.The Private Office and wider Knight Frank network would love to be of assistance.THE WEALTH REPORT2The Wealth Report takes you on a unique journey through our index results,expe

29、rt insights,thought-provoking interviews,future views and data that help shed light on some of the key issues affecting how you live,work,invest and give backFLORA HARLEYExecutive Editor of The Wealth Report,Flora has a passion for economics,quizzes and all things fitnessRUTH WETTERS Part of our Ana

30、lytics team,data scientist Ruth loves maps and languages.She is the brains behind the flight trends graphics on page 42KATE EVERETT-ALLENHead of Global Residential Research and curator of our Home chapter,Kate is a hispanophile,mountain-lover and keen photographerPATRICK GOWER Cycling fanatic Patric

31、ks beat includes the property market,architecture and sustainability.He digests the latest Private Office trends on page 46 ANDREW SHIRLEYOur luxury and rural property correspondent enjoys rare whisky and classic cars,but isnt sure about NFTsANTONIA HARALAMBOUSAntonia takes a keen interest in geopol

32、itics,football and cockapoos.She examines private capital and real estate trends on page 14Our contributorsAbu DhabiAmsterdamBangkokBeijingChicagoDallasDubaiFrankfurtGuangzhouHong KongIstanbulLondonLos AngelesMadridMoscowMunichNew YorkParisRomeSan FranciscoSeoulSingaporeTaipeiTel AvivTokyoTorontoWas

33、hington DCZurich3THE WEALTH REPORTHOME32 PIRI 100 The results of our Prime International Residential Index(PIRI 100)38 Bang for your buck How far US$1m goes in a selection of prime residential markets39 Topping out The post-pandemic boom continues for super-and ultra-prime properties40 Where next?Th

34、e trends driving prime residential markets in 202342 Connections The new maps of connectivity that are reshaping the world44 Buying patterns Whos buying where?We take a deep dive into the most diverse property markets worldwide46 Private view Our global teams share their insights into what private c

35、lients are planning in 2023 INTRODUCTION 04 Key findings A whistle-stop tour of The Wealth Reports top takeaways06 What a difference a year makes How the year of“permacrisis”is shaping future investor trends10 Wider horizons With global mobility on the rise,three experts share their insightsINVESTIN

36、G14 For the record Our data dashboard of private capital trends in commercial property19 Full steam ahead Where and what will private investors target in 2023?22 Is it time to simplify ESG?We marshal the arguments for a more focused framework 24 Commercially minded Our experts identify the key oppor

37、tunities for those investing in commercial propertyPASSIONS52 Inflation busters The results of the Knight Frank Luxury Investment Index56 Wilderness reimagined Pioneering philanthropist Paul Lister shares his Highland vision60 Databank The numbers behind The Wealth Report64 Certainly uncertain Some

38、final thoughts on what may lie aheadTHE WEALTH REPORT4P6 WEALTH CREATION TURNS A CORNERChallenging markets meant the majority of UHNWIs saw their wealth decline last year,with their collective wealth falling by 10%(equivalent to US$10.1 trillion).The epicentre of the crisis,Europe,was at the sharp e

39、nd with an average 17%fall,while Africa demonstrated the most resilience with only a 5%drop.In a sharp reversal,69%of wealthy investors expect growth in their portfolio this year,with confidence driven by asset repricing,perceived value opportunities and an expected economic rebound.P8 CHANGING INVE

40、STMENT STRATEGIESThis newly minted wealth will be put to work with investors targeting capital growth(31%of respondents),capital preservation(26%)and income generation(23%).Expect increases in investment allocations,with almost a third of investors looking at property investments to provide an infla

41、tion hedge and diversification.A cautious approach will see 29%of investors reduce debt volumes.P14 PRIVATE CAPITAL IN THE ASCENDANCYMore expensive debt and heightened uncertainty saw investors retreat in the second half of last year.While institutions reduced real estate investment by 28%in 2022,pr

42、ivate capital was less defensive,falling only“An ironic legacy of Covid has been a massive growth in the desire for mobility”Key findingsLiam Bailey,Knight Franks Global Head of Research and Editor-in-Chief of The Wealth Report,shares his key insights from the 17th editionAn historic shock.Last year

43、 the Ukraine crisis fuelled the European energy crunch and supercharged already surging inflation.As a result,2022 saw one of the sharpest upward movements in global interest rates in history,leading to economic conditions which Collins English Dictionary neatly dubbed the“permacrisis”.but now its t

44、ime to look beyond the“permacrisis”Significant risks remain for the global economy.Inflation in major economies is above target,interest rates are still rising,and consumers are facing a serious cost-of-living crisis.But in this years report,we argue that investors should look beyond these risks.As

45、the interest rate pivot approaches later this year we believe market sentiment will shift,quickly,and investors need to be well placed to take advantage of the very real opportunities emerging across global real estate markets.THE WEALTH REPORT5“Changes to investment criteria,funding and market tren

46、ds will drive investor behaviour”8%and accounting for a record 41%of the US$1.1 trillion committed by all investors.Private investment was dominated by allocations to residential(43%),offices(18%)and logistics(15%).While US cities led in terms of volumes,London took the biggest share(15%)of cross-bo

47、rder investment,followed closely by Singapore.P32 PRIME RESIDENTIAL GROWTH SLOWER BUT STILL POSITIVEOur Prime International Residential Index(PIRI 100)confirms that average luxury house price growth slowed to 5.2%last year,although with 17%of global UHNWIs buying a home in 2022 this was still the se

48、cond strongest year on record.Some 85 of the 100 markets tracked saw positive price growth,led by Dubai(44%)and Aspen(28%).At the other end of the ranking,markets that led through Covid-19 saw big reversals including New Zealands Wellington(-24%)and Auckland(-19%).P35 WITH SUNBELT AND SNOWBELT RESOR

49、TS IN THE LEADWealth preservation,hybrid working and early retirement themes supported resort markets,with sun(up 8.4%)and ski(8.3%)locations outperforming average prime market growth in 2022.This strength is reflected by our research into the high diversity of buyer nationalities in markets such as

50、 France,Spain and Italy(page 44).P39 SUPER-PRIME GROWTHAt the very top of the market the number of super-prime(US$10 million+)sales in 2022 slipped against the 2021 total,although it remained 49%higher than in 2019.New York,Los Angeles and London led the pack in terms of numbers of sales.The even mo

51、re rarefied ultra-prime(US$25 million+)market was dominated by London and New York,with the former seeing the highest sales since 2014.P10 WEALTH AND TALENT ARE ON THE MOVE.An ironic legacy of Covid has been a massive growth in the desire for mobility.The 13%of UHNWIs who are planning to acquire a s

52、econd passport or citizenship is the tip of the iceberg.The boom in so-called digital nomads is only just starting promising disruption to outbound countries,destination markets,tax systems,residential rental demand and office requirements.AND GOVERNMENTS WANT TO CAPTURE ITCompetition to attract foo

53、tloose wealth is hotting up.Alternatives to Western investor visa schemes are growing,with surging applications in Turkey,as well as more flexible offerings in Dubai,Singapore and Hong Kong.Singapores sevenfold growth in family offices is testament to the size of the prize for exchequers.While educa

54、tion remains a big draw for London,Italys flat tax scheme is a wake-up call for the UK as a replacement Tier 1 Investor visa remains absent and the non-dom regime comes under more scrutiny.P19 PROPERTY IN DEMAND#1In the year ahead,19%of UHNWIs intend to invest directly into income-producing property

55、,with 13%set to take the indirect route.In terms of sectors in demand,healthcare leads,followed by logistics,offices and residential.Our own forecast for cross-border allocations suggests offices will lead in the year ahead,with London the top target.US investors will provide the firepower for almos

56、t 50%of cross-border volumes in 2023,with strong activity expected from Singapore,the UK,Canada,UAE and Switzerland.P22 INVESTMENT TRENDSChanges to investment criteria,funding and market trends will drive investor behaviour.The E in ESG dominates investor thinking,raising a question over the benefit

57、s of bundling it with the S and G.Refinancing with a widening funding gap will see debt funds grow.Grocery market disruption means a requirement for 10 million sq ft of last mile fulfilment space in the UK alone.Chinas reopening means student accommodation demand will be boosted in the UK,US,Austral

58、ia and Canada(page 24).P40 PROPERTY IN DEMAND#2While the proportion of UHNWIs set to buy residential property in 2023(15%)is down slightly from 2022,the high share of cash purchases(49%)will cushion the impact of higher rates and support prices.Of the 25 cities we provide forecasts for we expect 15

59、to see price growth this year.Dubai leads at 14%,with a huddle of others expected to see rises of 3%to 5%.Supply a constraint on the market since the beginning of Covid will ease as UHNWIs rationalise portfolios,which now average 3.7 homes.P35 RESIDENTIAL BUYERS FACE NEW REGULATIONSPurchasers need t

60、o navigate ever more global rule changes including a Canadian ban on non-residents buying this year and next,a new mansion tax in Los Angeles,tighter lending rules in Singapore,higher fees for Australias non-resident buyers and a new Spanish wealth tax.With buyers confirming they are actively seekin

61、g political stability and transparency of asset ownership,though,this is looking like the new normal.P52 ART AND CARS ARE BACK IN VOGUEThe ongoing passion for luxury collectibles pushed the Knight Frank Luxury Investment Index(KFLII)16%higher in 2022.Art(up 29%)and classic cars(25%)led the table,pro

62、pelled by record-breaking sales and some huge and unique collections coming to the markets.While rare whiskies only managed 3%growth last year,early adopters will be happy with a 373%10-year return.Looking ahead,prospects are good for the two leading categories with 59%and 34%of UHNWIs respectively

63、looking to invest in 2023.Even whisky(18%)might be set for a rebound.AND NOT TO FORGET.In this years packed edition,we also find space to introduce you to ESG-compliant wild venison,aquaponic trout(page 56),surfing tech millionaires in Portugal(page 46),defiant NFT investors ploughing US$1.6 billion

64、 into Bored Ape images despite a 50%price correction(page 55),a hopeful plea for“less speculation and more substance”in crypto assets,and a fecund range of natural capital investment opportunities.Read all about this and more,inside.THE WEALTH REPORT6“Europe saw the largest decline in wealth with a

65、drop of 17%,followed by Australasia with 11%and the Americas by 10%”What a difference a year makesLast year provided a triumvirate of shocks energy,economic and geopolitical and was aptly described as a year of“permacrisis”,as we noted in our Outlook Report 2023 in January.Data from our Wealth Sizin

66、g Model allows us to chart aggregate wealth levels and our Attitudes Survey reveals portfolio allocations with a third of total wealth in residential property,just over a quarter in equities and 21%in Total wealth held by UHNWIs shrank by 10%during 2022,a drop of some US$10.1 trillion.Flora Harley e

67、xamines how the fall-out from a year of“permacrisis”could shift investor strategies in 2023commercial property.Using this data,we can track what happened to total wealth in 2022.Although four in ten UHNWIs saw their wealth increase in 2022,the overwhelming trend was negative.Our tracker indicates th

68、at wealth held by UHNWIs fell globally by 10%in US dollar terms.That encompasses the change in residential property values(for prime market changes see page 32),commercial property values(page 14),fixed income,investments of passion(page 52)and other assets.The fall in wealth is unsurprising given t

69、he dramatic pivot in monetary policy that culminated in the worst performance for the traditional blended portfolio since the 1930s,as we also covered in our January update.Europe saw the largest decline in wealth with a drop of 17%,followed by Australasia with 11%and the Americas by 10%.Africa and

70、Asia by comparison saw the smallest declines with 5%and 7%respectively.KING DOLLARExchange rates had a significant impact.The strength of the dollar was unrivalled,driven by the Federal Reserves unwavering commitment to one of the fastest cycles of rate hikes in history.Very few currencies saw appre

71、ciation against the greenback the Singapore dollar ended the year 0.5%higher and the Brazilian real 5.4%.At the other end of the spectrum,the Venezuelan bolvar fell 73%,the Turkish lira was down 29%,the Japanese yen contracted 13%and the British pound ended the year down 11%.We will reveal how this

72、has altered the population of HNWIs and UHNWIs in May 2023 once full year data is available.However,our HNW Pulse Survey a survey of 500 HNWIs across 10 global locations undertaken in January 2023 reveals exactly what it means for investment decisions this year over the page.Lit up The US dollars st

73、rength in 2022 was unrivalledTHE WEALTH REPORT7AMERICAS-10%EUROPE-17%AFRICAASIA-5%-7%MIDDLE EAST-7%AUSTRALASIA-11%Portfolio make-upOn average what proportion of.total wealth is allocated to:Source:The Wealth Report Attitudes SurveyPrimary and secondary homes32%.investable wealth is allocated to:Equi

74、ties26%Commercial property directly (e.g.ownership of assets)21%Bonds17%Private equity/venture capital9%Commercial property indirectly through funds8%Other7%Commercial property indirectly through REITs5%Investment of passion(e.g.art,cars,wine,etc.)5%Gold3%Crypto assets2%WORLD-10%Attitudes Survey2022

75、2023 INCREASE 40%69%REMAIN THE SAME 16%18%DECREASE-44%-13%Sources:The Wealth Report Attitudes Survey,Wealth Sizing Model,MacrobondExchange rates as at 30 December 2022Measuring down%change in aggregate wealth held by UHNWIs in 2022Great expectationsHow did/do you expect your clients total wealth to

76、change in.THE WEALTH REPORT8Source:Knight Frank HNW Pulse SurveySource:Knight Frank HNW Pulse SurveyNote:Figures may not add up to 100%as“not applicable”also an option *Such as social activities,cultural activities,dining,etc.Investment portfolioCash reservesTravel overseasPersonal expenditure*Busin

77、ess operationsHoldings of residential propertyHoldings of commercial propertyLevel of debtDECREASENO CHANGEINCREASE46%47%39%36%34%32%28%27%28%33%30%36%31%47%34%30%23%17%25%24%17%15%16%29%Impact investing/philanthropy6%Capital appreciation31%Capital preservation26%Income generation23%Diversification1

78、4%31%are targeting capital appreciationHNW Pulse SurveyAppreciation firstPrimary goals for HNWI wealth in 2023Changing tackHow HNWIs plan to allocate their wealth in 2023 THE WEALTH REPORT9The recalibrationBalancing act HNWI portfolios are adapting to a new environmentOur HNW Pulse Survey paints a s

79、imilar picture,with just under a third of respondents stating that their main goal is capital appreciation,while around a quarter are targeting preservation.The picture is nuanced globally,with HNWIs across Asia-Pacific looking for growth,while preservation is the number one goal in Europe and Ameri

80、ca perhaps unsurprising,given the economic slowdown under way across Europe and the anticipated downturn in the US as higher interest rates take their toll.However,2023 has begun with renewed optimism and a more positive outlook than we saw in December 2022.How is this impacting investment decisions

81、?Almost half of HNWIs are looking to increase their portfolio in 2023.For the first time in over a decade,the return on cash has gone from sub-1%to more than 4%in the US:as a result,46%are looking to increase cash reserves.The flip side is that,with rising interest rates,29%are looking to reduce deb

82、t levels and only 27%to take on more.The appetite to deleverage is highest among Europeans.As we highlighted in our Outlook Report 2023 real estate was a top cited opportunity,and our HNW Pulse Survey indicates that property holdings are likely to increase.Whether for the perceived inflation hedge,d

83、iversification benefits,or as a boon in times of uncertainty,a third of HNWIs are looking to increase their residential holdings,while 28%will seek to increase their commercial property holdings.Our experts provide an overview of trends and opportunities on pages 24 and 46.Despite the economic uncer

84、tainty,global movement looks set to continue(see page 10)with four in ten HNWIs planning to increase travel overseas.A similar proportion plan to increase personal expenditure on leisure activities.Whether due to an ongoing reassessment of lifestyles or continuing pent-up demand from the pandemic,th

85、e economic outlook appears brighter.While there may be elements of“hunker down and ride it out”with some HNWIs not changing allocations,there will still be healthy activity in global markets especially among those looking to volatility as an opportunity.Optimism for wealth creation in 2023 is high d

86、espite the turbulence and aggregate decrease seen in 2022,with 69%of Attitudes Survey respondents expecting their clients wealth to increase this yearTHE WEALTH REPORT10Wider horizonsGlobal mobility has long been a must-have for wealthy investors,fuelling demand for second passports,visas and citize

87、nships.Liam Bailey asked three experts for their take on the latest shifts in the marketNADINE GOLDFOOTManaging Partner,Fragomen UKOn 17 February 2022,as Russian tanks and troops massed on the Ukrainian border,the UK government announced the immediate and permanent closure of its Tier 1 Investor vis

88、a scheme for foreign nationals.Dramatic as it was,this announcement was just one change in a sector undergoing rapid growth and evolution.Speaking to three leading experts in the field it is clear that demand for mobility has expanded rapidly since the Covid-19 pandemic,and now covers a broader demo

89、graphic including those seeking protection from arbitrary border lockdowns,or looking to work in another country.13%of UHNWIs are planning to apply for a second passport or new citizenship according to our Attitudes SurveyCovid led to huge growth in mobility requirementsThe number of people who were

90、 suddenly able to do their existing work in a new country expanded rapidly.The“digital nomad”boom has brought many more people into the ambit of global mobility and countries have responded by finding new ways to attract them.Passive investment is out and active is inThis shift in demand has been re

91、flected in a change in government objectives.Following the global financial crisis,housing busts in markets such as Spain and Portugal spurred property-led investor visa schemes.With stronger markets,countries are changing focus towards schemes that promote job creation,innovation and entrepreneuria

92、l activity.Growth in nomadic workers will be constrained by tax rules and other considerationsWhile employees may be attracted to the idea of moving their laptop from a desk in Frankfurt to a caf table in Lisbon,their employer might not be so keen.Freelancers and the self-employed have led the charg

93、e so far,with taxation complications,social security and labour law considerations limiting the freedom of employed staff to join in.While destination countries are keen to work on simplifying tax rules,engaging outbound countries to co-operate will be more challenging.The UK has hobbled itself,but

94、not criticallyThe removal of the Tier 1 Investor visa needs to be understood as political theatre.The most recent iteration of the visa category was heavily regulated,with high compliance hurdles.That said,its removal fits with the shift to active categories.It probably makes the UK somewhat less at

95、tractive to some investors,but the country still punches far above its weight in terms of attracting the worlds wealthy.Future changes to non-dom rules may have a more significant impact.The lion roars Singapore is attracting wealthy global residents11THE WEALTH REPORTKRISTIN SURAK Associate Profess

96、or,London School of Economics The pandemic made people question the assumption that mobility was assured US citizens have a“good passport”with many travel privileges,but Covid threw these out the door.Suddenly,they faced challenges even to enter Europe.The result has been a huge increase in the numb

97、er of Americans looking into investment migration options.If we look at demand globally,we see a shift in peoples time horizons as well,with many now looking for“medium-term”solutions,namely places where they may want to spend several months and that offer access to good healthcare as well.European

98、and US visas are not the only optionsWestern schemes tend to dominate industry discussions,but other countries are becoming more important.In 2019,Malaysias investor visa was bigger than all European schemes combined.South Korean and Panamanian visa schemes are in high demand too,with both countries

99、 approving more applications than the EU powerhouses of Portugal and Greece.For citizenship,Turkey is the standout growth market with applications reaching nearly 1,000 per month during Covid.True global mobility is a fantasy,but regional schemes are growingThe idea that we could ever see open borde

100、rs at a global level is just not a possibility,due to the wealth disparities between countries.But at a regional level there is a growing drive to allow movement.The EUs Schengen Zone might be the most high-profile example,but it is joined by similar cases elsewhere:ECOWAS in West Africa,CARICOM in

101、the Caribbean,the GCC in the Middle East and Mercosur in South America.Could any of these expand?Possibly,although its easier to imagine Australia joining Schengen than a truly pan-global arrangement.No one country has control over global immigration rulesAs Vanuatu discovered recently,if compliance

102、 rules on your visa scheme become too lax,the EU can simply end visa-free travel and the value of your scheme plummets.But for the big players on the scene the US and the EU other geopolitical interests can play a role too:interestingly,neither has pressured Turkey over its popular citizenship-by-in

103、vestment programme even though new Turkish citizens gain opportunities to access both places.PIERS MASTER Partner,Charles Russell Speechlys The UK has many strengths,but other countries are working harder to attract wealthItalys flat-tax scheme for wealthy foreign residents has been a success and po

104、ints to the potential win for countries who get these schemes right in terms of growing tax revenue and raising inward economic investment.The closure of its Tier 1 Investor visa weakened the UK,but this can be remedied if there is political agreement on the value of attracting international wealth

105、to drive business growth.While tax is rarely the main driver of residency decisions for UHNWIs,ongoing uncertainty around issues such as the acceptability of non-dom status could undermine confidence in the UK.Singapore and Dubai will grow rapidly as wealth hubs While the UK,as well as the EU and US

106、,still attract considerable numbers of globally footloose wealthy residents,it is undeniable that Singapore and Dubai are emerging as critical wealth hubs.Dubai has developed a very pragmatic approach to attracting wealthy residents and has worked hard to correct a perceived area of weakness,namely

107、length of stay.Visa options used to be mostly short term and work related,but with the Golden Visa scheme,longer-term residence becomes a possibility.Singapore is developing a very attractive tax and regulatory framework which will serve to attract not only more Asian,but also global,wealthy residen

108、ts.In response,we are planning to open an office in Singapore later in the year.Dont underestimate the importance of education and lifestyleOne theme that bodes well for the UKs ability to attract wealth long term is global demand for best-in-class education.The UK has the most important cluster of

109、private schools anywhere,and a world-beating university sector.A cross-border move driven by education is“sticky”:it tends to lead to deeper roots being put down with children building local networks,and longer-term investment results.True offshore locations will always be in demand by UHNWIs,but th

110、e biggest requirement is for residence in major developed markets.Tax is a factor,but lifestyle and education win out.“The UK has the most important cluster of private schools anywhere in the world,and a world-beating university sector”“For citizenship,Turkey is the standout growth market with appli

111、cations reaching nearly 1,000 per month during Covid”InvestingNavigate the multiple drivers and trends steering global investment and commercial property markets 14 FOR THE RECORD Private capital was the biggest market investor in 2022.We reveal who,what and where19 FULL STEAM AHEAD UK offices are t

112、he top sector for private capital in 2023 but where else are investors looking?22 IS IT TIME TO SIMPLIFY ESG?How focusing on E for emissions could bring new clarity to ESG24 COMMERCIALLY MINDED With a quarter of HNWIs looking to invest US$5 million-plus,our global experts offer some top tipsTHE WEAL

113、TH REPORT14INVESTINGThe whoTotal by investor type(US$bn)-13%CHANGE VS 2021%CHANGE VS 10-YEAR LONG-TERM AVERAGE-28%-42%12%17%2%-28%104%Unknown52.3Institutional440.1Private454.8Public122.4User/other47.2-8%62%Private investors were the most active buyers in global commercial real estate investment in 2

114、022.Antonia Haralambous dissects the numbers to uncover the trendsFor the recordDespite the global macroeconomic and geopolitical headwinds that persisted throughout 2022,investment from private sources remained robust.Private investors were the most active buyers in global commercial real estate ma

115、rkets in 2022 with US$455 billion invested,accounting for 41%of the total,according to RCA.This represents private buyers highest share of global commercial real estate investment on record.Its also the first time private investment has surpassed institutional investment.Institutions invested a tota

116、l of US$440 billion in 2022,28%below 2021 volumes,but 2%above the 10-year average.By comparison,while private Source:RCA1.12trnTotal US$global commercial real estate investment in 2022investment was down from its all-time high of US$493 billion in 2021,2022 was still the second strongest year in his

117、tory,sitting 62%above the 10-year average.SECTORS OF CHOICEMultifamily residential or private rented sector(PRS)offices and industrial assets attracted the greatest interest,as reflected in our Attitudes Survey which shows that 43%of respondents are already invested in offices and 40%in industrial a

118、ssets.Ownership in retail,life sciences,healthcare,PRS,data centres and education real estate all increased in 2022 compared with the previous year.THE WEALTH REPORT15INVESTINGThe whatPrivate capital investment split by sector(US$bn)-16%-12%CHANGE VS 2021%CHANGE VS 10-YEAR LONG-TERM AVERAGE-4%-15%9%

119、17%Apartment194.9Office84.1Industrial&logistics70.3Retail62.5Hotel30.6Senior housing&care10.0Residential condominium2.5-13%46%8%9%117%42%35%103%To whereTop 10 destinations for private capital in 2022(US$bn)US 328.3France 12.2Canada 14.5UK 14.6Germany 14.6Japan 8.6Chinese mainlandSwedenNetherlandsSou

120、th Korea6.87.44.9UKUSGermanyCanadaFranceJapanSouth KoreaNetherlandsSwedenChinese mainlandFrom whereTop 10 sources of private capital in 2022(US$bn)302.3USCanadaFranceGermanyUKJapanChinese mainlandSouth KoreaNetherlandsSweden13.913.810.99.87.86.34.45.83.6Source:RCA%CHANGE VS 2021 21%1%-40%-6%-3%-8%-3

121、8%-12%-45%-24%CHANGE VS 2021-4%-14%27%-37%-3%-8%25%-49%-51%-13%3.7THE WEALTH REPORT16INVESTINGLONG-TERM AVERAGE 243.22008 118.42009 68.62010 98.52011 126.92012 155.82013 187.72014 230.9Adding upTotal private capital investment volumes since 2008(US$bn)62%41%Margin by which the total invested by priv

122、ate capital in 2022 is above the 10-year averageProportion of total commercial real estate investment from private capital in 2022,the first time this has surpassed institutions and a record shareTHE WEALTH REPORT17INVESTING2015 251.02016 270.52017 289.52018 317.82019 347.02020 262.02021 493.22022 4

123、54.8Source:RCA455bnTotal US$invested by private capital in 2022THE WEALTH REPORT18INVESTINGNew YorkDallasLos AngelesMiamiHoustonChicagoSan FranciscoWashington DCParisBostonThe US,UK,Germany,Canada and France were the top targets for private capital last year.However,of the top 10 destinations,the UK

124、 and France were the only countries to see year-on-year increases in total private investment:up 1%to US$14.6 billion in the UK while France,with its resilient economy and relatively low inflation levels compared with the rest of Europe,jumped 21%to US$12.2 billion.DRIVING DECISIONSInflation will be

125、 a significant factor driving investment decisions in 2023,with 80%of respondents to our HNW Pulse Survey stating that it would influence their investment decisions either significantly(37%)or to some extent(43%).In order to navigate the higher inflationary environment,investors may pivot towards co

126、mmercial real estate due to its strong growth potential,particularly in assets with indexation.Nevertheless,there are indications that inflation may already have peaked across most major economies,and we could see its influence on investment choices start to moderate as the year progresses.Keeping i

127、t localTop cities for domestic private capital in 2022(US$bn)Global outlookTop cities for cross-border private capital in 2022(US$bn)“Private investors from the US were the largest source of capital last year,with US$302 billion invested”LondonSingaporeBerlinDallasTorontoWashington DCAmsterdamCopenh

128、agenNew YorkMunich 25.0 22.9 22.1 2.5 1.81.0 1.00.9 0.70.7 0.6 0.60.5 11.8 11.5 9.18.6 8.66.05.5Source:RCAUS cities remained a target for private buyers in 2022.Of the cities attracting private capital investment,US metropolises accounted for 67%of the total volume,with Paris the only non-US cities

129、to feature in the top 10.While eleventh overall for total private investment(cross-border and domestic)in 2022,London was top for cross-border private capital with US$2.5 billion.Overall,this accounted for 44%of the total private investment into the city and 15%of total global cross-border private i

130、nvestment into cities in 2022.Private investors from the US were the largest source of capital last year,with US$302 billion invested more than a quarter of total commercial real estate investment and 66%of private investment.However,investment from US private buyers was down 3%year-on-year.Of the t

131、op 10 sources of private capital last year,investors from France and the Chinese mainland were the only buyers to increase investment in 2022,up 27%and 25%on the previous year to US$13.8 billion and US$6.3 billion respectively.For a look ahead to whats next for private capital,see the next page.New

132、YorkDallasLos AngelesMiamiHoustonChicagoSan FranciscoWashington DCParisBoston19THE WEALTH REPORTINVESTINGFull steam aheadWill private buyers remain active in 2023?Antonia Haralambous draws on data from our Capital Gravity Model to predict what the year might have in store for private capitalMacroeco

133、nomic headwinds are expected to continue in many locations globally over the coming year,even if there are some green shoots of optimism and the IMF has revised its forecasts up for once.In previous periods of dislocation,we have seen private buyers rotate back into the global commercial real estate

134、 market.Will we see it happen again in 2023?Following the global financial crisis,private buyers increased investment by 44%and in 2021,following the first year of the Covid-19 pandemic,global private investment grew by 88%.The appeal of commercial real estate clearly remains,despite the economic ba

135、ckdrop.In fact,19%of respondents in our Attitudes Survey were looking to invest directly in commercial real estate in 2023,while 13%were seeking to invest indirectly,for example through REITs or debt funding.In line with this,our Capital Gravity Model,from Active Capital,forecasts 2023 to be the str

136、ongest year for cross-border private capital since 2019.This is reflected in our HNW Pulse Survey,with nearly 40%of respondents considering investing in commercial property outside their country of residence.Debt looks set to be a key consideration for all investors in the year ahead.With interest r

137、ates at multi-year highs,and the all-in cost of debt elevated in most markets,we could see affordability challenges.This is especially pertinent given that global commercial real estate investment was 19%and 31%above the long-term average in 2017 and 2018.If we assume a five-year loan term,debt-back

138、ed buyers will be facing higher costs upon refinancing as these loans come to maturity this year.Higher debt costs may lead to opportunities for equity injection or partnering(see page 28 for more),as well as assets being brought to the market,should investors choose not to refinance.This is where p

139、rivate buyers may be particularly well positioned in“Debt looks set to be a key consideration for all investors in the year ahead”2023 as private capital is typically less reliant on debt than other investors.What will they be targeting and where?The US is expected to be the top destination for priv

140、ate capital next year,followed by the UK,Germany,Japan and the Netherlands.Of the top 10 destinations for private cross-border capital,seven are in Europe,with private investors favouring the continent.London calling UK offices are the top target for private investors in 2023Global outlookTop cities

141、 for cross-border private capital in 2022(US$bn)THE WEALTH REPORT20INVESTINGSource:The Wealth Report Attitudes Survey Sources:RCA,Knight Frank Research Note:Based on largest flows only and may not represent all flows into or out of each market.Private includes HNWIs and private equity.Figures are pr

142、eliminary and subject to changeInternational allocationTarget sectors for private cross-border capital investment in 2023Offices43%Industrial&logistics19%Residential19%Retail12%Hotel7%35%33%33%32%31%27%24%20%17%15%15%15%11%Source:The Wealth Report Attitudes Survey Note:Respondents could choose multi

143、ple sectors In the spotlightSectors of focus for UHNWI investors in 2023HealthcareIndustrial&logisticsOfficesResidential private rented sector(PRS)Hotels&leisureRetailDevelopment landRetirementStudent housingLife sciencesAgriculturalData centresEducationGlobal appetite for real estateProportion of U

144、HNWIs planning to invest either directly or indirectly in commercial property in 202313%11%AMERICAS20%14%EUROPE14%13%AFRICA19%13%GLOBAL AVERAGE24%18%AUSTRALASIA17%13%ASIA25%10%MIDDLE EASTDirectlyIndirectly(e.g.through REITs or debt funding)Attitudes SurveyTHE WEALTH REPORT21INVESTING“We forecast UK

145、offices to be the top target for private investors next year”Tokyo drift Office space in Japan is attracting US investors Offices will continue to dominate.More than 40%of total private cross-border capital is forecast to be targeted at the office sector,while industrial and residential are each exp

146、ected to receive a 19%share.We forecast UK offices to be the top target for private investors in 2023,with offices in the US,Germany,Australia and the Netherlands also likely to see robust demand.More traditional sectors will remain in demand for HNWIs,albeit alternative asset classes are also likel

147、y to be targeted.Our Attitudes Survey highlighted that just over a third of respondents globally were looking to invest in healthcare-related assets in 2023,the second year in a row that this asset class topped the wish list.The results also pointed to strong demand for private rented sector,leisure

148、,hotels,student accommodation,life sciences and data centres.These more specialist sectors are often counter-cyclical and benefit from structural drivers which typically prove popular with investors,especially in times of uncertainty.Who will be the most active?Investors from the US are forecast to

149、be the most active,accounting for roughly half of all global private cross-border capital into commercial real estate in 2023.Likely targets include offices in the UK,Japan and Singapore,as well as industrial assets in Germany,Japan and South Korea.Private investors from Singapore,Germany,the UK and

150、 Canada are also expected to be active this year.More specifically,HNWI capital from Brazil,the US,UAE,Germany,Spain and Switzerland is forecast to be prominent in 2023,with offices and retail in the UK a particular focus.Close to 10%of respondents in our HNW Pulse Survey were looking to complete a

151、transaction of US$20 million or more in 2023.This figure jumps to 20%for investors from the Chinese mainland and 14%for those from both Singapore and Spain.Even as the global economic outlook becomes less gloomy,a heightened level of uncertainty remains and risks are skewed to the downside,as noted

152、by the IMF in its January World Economic Outlook Update.With almost half of our Attitudes Survey respondents citing real estate as an opportunity for wealth creation,private investors will continue to be active throughout 2023 as they diversify and seek capital appreciation as their primary goal(see

153、 page 9).We explore some of the global opportunities and associated entry points on page 24.THE WEALTH REPORT22INVESTINGIs it time to simplify ESG?For the past five years The Wealth Report has been tracking private investor interest in ESG themes.With this increasingly coalescing around environmenta

154、l sustainability,Liam Bailey asks whether a stripped-down investment framework might make for more successful outcomes As every investor must by now be aware,ESG brings together three distinct investment criteria:E represents environmental themes;S considers social outcomes;while G looks at governan

155、ce issues.From an investor perspective,the rapid evolution of environmental regulation in the US,EU and the UK confirms the need to focus on the E aspect of their portfolios.This is not true to anything like the same degree for the S and the G.The 2020 complaint from Hester Peirce,Commissioner on th

156、e US Securities and Exchange Commission,that“ESG is broad enough to mean just about anything to anyone.and.allows experts great latitude to impose their own judgements,which may be rooted in nothing at all other than their own preferences”still seems a fair challenge in relation to the latter two ar

157、eas of ESG.As environmental requirements for buildings and investments become increasingly codified,the benefits of bundling S and G into the mix become more debatable.Isnt there a potential win to be gained from simplifying the investment objectives of ESG and,as The Economist argued last year,supe

158、rcharging the impact of environmental improvements through a relentless focus on E redefined to mean“emissions”rather than the broader spread of topics implied by the more loosely drawn term“environment”?Our research into private investor objectives suggests there may be some justification for this

159、approach.In The Wealth Report in 2021 we revealed that while six in ten UHNWIs felt they lacked the information they needed to assess ESG-related investments,43%“ESG is broad enough to mean just about anything to anyone and allows experts great latitude to impose their own judgements”HNW Pulse Surve

160、ySource:Knight Frank HNW Pulse Survey1Reducing carbon emissions through operation2Minimising embodied carbon (i.e.emissions associated with materials and construction processes)3Minimising waste of resources4Minimising consumption of resourcesMission zeroEnvironmental considerations ranked in order

161、of importance to HNWI investment decisionsClimate changing mindsHow far environmental considerations impact HNWI investment decisionsTo some extent46%To a significant extent31%Not at all22%23THE WEALTH REPORTINVESTING“In the Attitudes Survey,the three top-performing criteria all related to environme

162、ntal issues,ahead of social criteria such as accessibility”were increasingly interested in compliant investment opportunities.The key driver behind this ESG investment push,as we revealed in our 2022 report,was future-proofing portfolios,but even with this rationale almost half of investors stated t

163、hat finding the right opportunity was a barrier.This year our Attitudes Survey results,revealed in Januarys Outlook Report 2023,took the analysis deeper,allowing us to understand which ESG-related criteria UHNWIs are considering when investing in property.The results showed that energy source(57%),o

164、pportunities for green refurbishments(33%)and materials/embodied carbon(30%)are increasingly being factored into the decision-making process.When we asked about the leading risks and opportunities relating to the ability to create and grow wealth,energy and climate issues were cited as both.These fi

165、ndings are reinforced by our HNW Pulse Survey,which confirms that environmental considerations impact investment decisions for nearly four-fifths of investors.The results again clearly point towards carbon emissions as the leading environmental investment consideration.It seems clear from our resear

166、ch that the E in ESG dominates in terms of investor interest.In the Attitudes Survey,the three top-performing criteria all related to environmental issues,ahead of social criteria such as accessibility.The G doesnt even get a look in.This reticence may stem from concerns such as those raised by Hest

167、er Peirce.The past 12 months illustrate the challenges involved in trying to identify good and bad investment practice from a social and governance perspective.Checklist The top five ESG-related criteria UHNWIs consider when evaluating property investments Source:The Wealth Report Attitudes Survey E

168、nergy source(e.g.solar,wind,heat pump)57%Opportunity for refurbishments33%Materials used/embodied carbon footprint30%Accessibility29%Social impact27%Attitudes SurveyIn February 2022,if you leased R&D space to an arms manufacturer some fund managers would have considered you beyond the pale;do the sa

169、me a month later and the Ukraine crisis meant you were beyond reproach.Investors may regard the increase in environmental regulatory requirements with trepidation,as businesses set about scaling up their compliance teams to report on their scope 1,2 and 3 carbon emissions.That means all the emission

170、s a company makes directly;all those it makes indirectly;and all those it causes its suppliers to make and that customers make when using its products or services.It sounds like a significant challenge,but at least E has a decent primary target to reduce carbon emissions.But who sets the objectives

171、and defines the standards for S and G?Is providing retail property a social benefit?Is real estate dedicated to employment better for society than that dedicated to housing?Should investors be prioritising diversity at board level,or accessibility in early careers?None of this means an investor shou

172、ldnt prioritise the delivery of,say,affordable housing if they see a business opportunity,or if it fulfils a personal or investment goal but ESG criteria may not be the best guide to aid this decision-making process.With most private investors confirming an interest in environmental objectives,and w

173、ith this being reinforced by regulation,and with the S and the G remaining less codified and subject to shifting notions of what makes an appropriate target,simplifying ESG may be the best way to help meet private investors primary non-financial objectives.THE WEALTH REPORT24INVESTINGMore than a qua

174、rter of HNWIs are looking to increase their commercial property holdings,according to our HNW Pulse Survey.Flora Harley asked our global experts for insight into how HNWIs are investing in their markets,plus their top tips for 2023Commercially mindedWhether in a private capacity or through an establ

175、ished family office,HNWIs are commanding a growing slice of commercial property market activity(see page 14).For seasoned investors the opportunities may appear clear,while others see high barriers to entry.In fact,the average level of investment required from private individuals is often smaller th

176、an for big institutional players.HNWI transactions averaged US$18 million over the past decade,compared with US$40 million for institutions,according to analysis of RCA data.Among our HNW Pulse Survey respondents,54%of those planning to invest are seeking opportunities under US$1 million and one in

177、ten will be investing US$20 million or more.Knowing what options are available at differing price points will be critical to success.We gathered our global experts to explore the various ways in which wealthy individuals are investing in commercial property globally and to share their top tips.Ticke

178、t sizeHow much those considering investing in commercial property say they are likely to investSource:Knight Frank HNW Pulse Survey“HNWI transactions averaged US$18 million over the past decade”US$500,0001m27%US$1m5m16%US$5m10m8%US$10m20m9%More than US$20m11%Up to US$500,00027%HNW Pulse SurveyTHE WE

179、ALTH REPORT25INVESTINGCovid-19 travel restrictions.A record 7.2 billion was invested in purpose-built student accommodation in 2022 in the UK,a 62%year-on-year rise.What are your top tips for those looking to invest?Energy and operational costs have been a major issue throughout 2022 and highlighted

180、 the importance of ESG throughout the property market.Energy efficiency will be under increasing scrutiny:our research previously demonstrated the premium attached to green-rated buildings,but this may expand given upcoming regulations and historically high energy costs.Stacking up Supermarkets are

181、tipped as an opportunity for 2023What trends are you seeing among wealthy investors in the UK?Private clients are typically investing anywhere from 5 million to 25 million on average.In the long term,cash rich private investors have been taking advantage of repricing,currency benefits and less compe

182、tition from larger institutions to target the UK,among other locations.They have been opportunistic across a diverse range of sectors and risk profiles throughout 2022.As a result,we saw an increase in demand for offices,retail and hospitality which offer post-Covid recovery opportunities along with

183、 strong fundamentals.What are the opportunities for 2023 and beyond?Supermarkets and logistics,especially larger lots with good covenants.The fundamentals are still strong and tie in with the supply chain for both online and in-person consumers.Online sales are anticipated to grow by an additional 3

184、1 billion by 2026.Over the next five years,this could result in additional demand for roughly 10 million sq ft of last-mile fulfilment space.Then there are the living sectors,which are more defensive.Student housing has favourable demographics,and we are likely to see greater international demand fo

185、llowing the lifting of ALEX JAMES Head of Private Client Advisory,UK What trends are you seeing among wealthy investors looking to the living sectors?First-time investors tend to start small to get a general feel for the transactional process before committing larger sums of capital.In the past year

186、 we have sold assets to HNWIs or family offices ranging from 2.5 million to 40 million.Where is the added value and what are the opportunities for 2023 and beyond?The rental market was extremely strong in 2022 and is expected to continue to grow in 2023.There is a natural lag in capturing rental gro

187、wth with 12-month tenancies,i.e.those that commenced or renewed in Q1 2022 failed to capture the growth in the later part of the year.This presents an opportunity for investors acquiring residential assets this year,who can expect to see a significant reversion in their headline rents.Investors are

188、looking to balance their portfolios between core London assets and regional investments.Regional assets offer more attractive returns(yields tend to be 75100 basis points higher)and a lower entry point,with the average price per unit being considerably less.Some would-be vendors have been discourage

189、d from divesting by the economic and political backdrop of the second half of 2022.This lack of stock,paired with continued demand for residential investments,has resulted in good competition which has underpinned pricing.What are your top tips?It is crucial for incoming investors to have efficient

190、management structures in place.Owning residential investment property requires proactive asset management and all investors need to be aware of the relevant statutory compliance,legislative and best practice issues.RESIDENTIAL INVESTMENT HARRISON COLLINSResidential Development Capital Markets,UK “En

191、ergy and operational costs have been a major issue throughout 2022 and highlighted the importance of ESG throughout the property market”THE WEALTH REPORT26INVESTING010203“We have seen an array of investors,with the most active coming from the Emirates,India and the UK”What trends are you seeing amon

192、g wealthy investors in France?HNWI investors are able to position themselves on a wide range of investments,whether in terms of risk level(from value-added to core)or type of asset(e.g.office or residential).In the past year HNWIs and family offices have been active both with transactions under 10 m

193、illion and landmark investments well over 100 million.Where are the opportunities for 2023 and what are your top tips?In the context of tightening financial conditions,the ability of HNW investors to exploit their equity resources and mitigate the impact of debt should be a source of opportunity.Mor

194、eover,the attractiveness of the Paris market in the luxury retail and residential segments should continue to appeal.ALEXANDRE OLIVIER Capital Markets,France ANDREW LOVE Head of ME Capital Markets&OLSS,Middle EastWhat trends are you seeing among wealthy investors across the Middle East?Private inves

195、tors can start as low as US$2 million to US$3 million or go up to US$200 million.Typically,the sweet spot is around US$20 million to US$50 million.We have seen an array of investors,with the most active coming from the Emirates,India and the UK.Where are the opportunities for 2023 and beyond?Prime r

196、esidential has been the best performing sector(see page 32).HNWIs have sought out mixed-use single owned towers or compounds of villas which can be broken up to sell individually.We have also seen HNWIs speculatively build good quality warehouses,take on the leasing risk and then sell to funds.More

197、recently,we have seen a similar play in the co-living and data centre sectors,which are emerging asset classes here.What are your top tips?If purchasing to hold,due diligence and market assessment are critical.The build quality and maintenance of assets is generally poor compared with Europe and tha

198、t can lead to greater capital expenditure than anticipated,limiting returns.27THE WEALTH REPORTINVESTING020401.Triumphant Pariss luxury retail market is appealing02.High life Living sectors are a top target 03.Turning tide Renewable energy is in the spotlight04.Down under Australias agricultural sec

199、tor opens upWhat can wealthy investors expect to see when investing in farmland?For wealthy investors there is often a residential amenity element to agricultural investments.When looking at a basic farmland investment,in the UK the entry point would be around 1 million for 100 acres.For scale,the m

200、inimum size of a commercial farm is 1,000 acres,or around 10 million.In terms of forestry land,around 1 million would be required for a modest investment.Where is the added value and what are the biggest opportunities for 2023 and beyond?Natural capital,nature-based solutions,climate change,biodiver

201、sity loss all have come to the fore over recent years and farmland is key to delivering on targets globally.The commitments from COP15 in Montreal last year indicate greater value to come.Some of the biggest opportunities will be in locations where land has been treated poorly,offering the greatest

202、scope to boost natural capital values and carbon credit opportunities.The other area is food security.This was highlighted by global food shortages and price hikes in 2022 following Russias invasion of Ukraine,which accounts for 42%of the worlds sunflower oil exports and 10%of wheat.UK Prime Ministe

203、r Rishi Sunak has committed to introducing a government food security target this year.What are your top tips?Have a clear strategy.How will you manage the land?Whats the objective and time frame?How will you finance it and who will run it?Farmland can be relatively cheap in developing nations,but y

204、ou need a local management team that you can trust if you dont live there.The other consideration is environmental and climatic conditions.In the 2021 edition of The Wealth Report our Analytics team mapped predicted climate shifts to pinpoint parts of the world likely to see the biggest impacts on t

205、heir agricultural sectors.This information is key for longer-term investing.The Australian government has a plan to increase the value of its agricultural sector from A$60 billion to A$100 billion by 2030.This requires improvement of landscape functions,provision of livestock with high welfare stand

206、ards,maintaining a powerful social licence and a biodiversity programme.Australia has a unique opportunity to leverage its location,efficient logistics networks and agtech to collaborate and make its agriculture industry a leader in the global market.We anticipate exports will increase significantly

207、 within the next six to seven years,with premium food products forecast to grow by 55%.Producers of sheep meat,almonds,wool,lentils and wine stand to benefit the most from increased access to the Indian market when the Australia-India Economic Cooperation and Trade Agreement(AI-ECTA)comes into force

208、 in early 2023.The Australia-United Kingdom Free Trade Agreement(A-UKFTA)will also prove advantageous once it takes effect later this year.AUSTRALIAN FARMLAND ANDREW BLAKE Head of Regional Capital&Agribusiness,AustraliaANDREW SHIRLEYHead of Rural Research,UKTHE WEALTH REPORT28INVESTINGSource:Knight

209、Frank Research.Notes:Exchange rate as at 30 December 2022.In Singapore residential developments are subject to Additional Buyer Stamp Duty(ABSD)of 30%for individual foreign buyers and 35%for entities.Nationals and permanent residents of Iceland,Liechtenstein,Norway,Switzerland and the US are not sub

210、ject to ABSD when purchasing their first residential propertyHEALTHCAREINDUSTRIAL&LOGISTICS OFFICESAustraliaAverage deal size US$1m3m US$315mUS$315mWhat this looks likeA pharmacy or optometry practice,or a small medical centre A strata industrial investment or a multi-tenanted industrial unit in a r

211、egional centre A strata office investment in Sydney of 5005,000 sq ft within an office tower or a small suburban office building UKAverage deal size US$2.5m17mUS$4m21mUS$2m17mWhat this looks like40100 bedsc.7,000 sq ft c.15,000 sq ft dependent on areaSpainAverage deal size US$2m20mUS$2m15mUS$10m50mW

212、hat this looks like100 beds for student and senior housing or clinics in multi-owner assetsGranular,single-let,urban logistics units21,50065,000 sq ft single assets in the city centre SingaporeAverage deal size Usually invested indirectlyUS$13m67mWhat this looks likeStrata offices,typically 2,00010,

213、000 sq ft 5+unitsBoutique hotels,generally in the form of heritage shophouses converted for hotel useWhat trends are you seeing among wealthy investors looking indirectly at property investment through debt?Debt funds backed by private wealth tend to play in the smaller ticket lending space,with loa

214、ns ranging from 5 million to 15 million per transaction.That said,we have also seen some funds issuing loans as large as 200 million.HNWIs in this space will typically be seeking an internal rate of return of 15%.They tend to target development or value-add opportunities where significant capital ex

215、penditure is required.We have also seen private debt funds offer bridging facilities.LISA ATTENBOROUGHHead of Debt Advisory,UKThere is an overarching drive towards investing in debt rather than equity because it represents better value.The debt is secured above equity in legal charges and returns te

216、nd to be in the mid-double digits.That means lower risk for a slightly lower but still very healthy return.Where are the opportunities for 2023 and beyond?The funding gap.Loans that were provided in 2018 carried an all-in cost of around 3%:now that cost has more than doubled.There will be a wave of

217、refinancing in 2023 where the loan amount will need to be reduced because of interest coverage ratios.This will drive a requirement for flexible capital as not all borrowers will be able to bridge this,creating a key opportunity for private capital via debt funds.Investors can bridge the gap through

218、 debt,mezzanine financing or preferred equity.What are your top tips?Have a unique selling point.New capital needs to differentiate itself,whether by focusing on a particular segment development,loans of a certain amount or in a specific geography or sector.Something that sets you apart will help yo

219、u find the right investment opportunities.Global perspectiveOur experts share their insights into what investors can expect to spend and what they will get for their money in the top five sectors of interest identified in our Attitudes SurveyTHE WEALTH REPORT29INVESTINGWhat are your clients looking

220、for when investing in commercial property?This year will provide a unique opportunity for private clients looking to enter the market as rising debt costs may lead to less institutional activity.We have seen major growth in the number of family offices around 700 at the end of 2022,a seven-fold incr

221、ease since 2017.An investment of around S$10 million to S$20 million is required to set up a family office,but we are also seeing families pool resources.Where is the added value and what are the opportunities for 2023 and beyond?There is an opportunity to create value by selecting good assets and i

222、mproving and operating them well.Operational sectors will outperform and are attractive for income security and long-term fundamentals.We expect more opportunities for overseas investors looking to partner with experienced on-ground managers as they invest heavily in management and operations platfo

223、rms.Asia-Pacific will be a hotspot with milder inflation and more robust GDP growth than other regions.Markets such as Japan,Singapore and Australia are expected to be the most active:Japan for its weak currency and comparatively low interest rates;Singapore for its safe-haven reputation;and Austral

224、ia for high transparency and softening prices.What are your top tips?Consider currency and how to hedge that position,and funding opportunities.The ability to purchase using cash enables private investors to act quickly.In the medium term they can then take on debt if required.Get the location right

225、 and be very clear about the purpose.Is it pure investment or is it income?HUMPHREY WHITE Managing Director,Spain NEIL BROOKES Global Head of Capital Markets,SingaporeNICHE ASSET CLASSESBuyers have realised that asset classes like government-leased offices,fast-food outlets and medical centres offer

226、 strong income security and benefit from consistent consumer demand.With economic growth forecast to slow in the near term,these types of asset remain in favour due to their defensive nature,and buyers are also anticipating long-term growth underpinned by rising land values.BEN BURSTON Chief Economi

227、st,AustraliaWhat trends are you seeing among wealthy investors in Spain?Investors typically make single investments of between 15 million and 25 million and target assets across Europe or further afield,sometimes for currency benefits.UHNWIs in Spain tend to prefer residential,and favour city centre

228、s.If they already own beautiful homes,then many seek to move into small build-to-rent schemes.Offices have seen some sizeable transactions from private wealth in the past year and hotels remain favourable.Where are the opportunities for 2023 and beyond?There is a drive for diversification.We have on

229、e client who bought a hotel in central Madrid earning 3%and invested 65 million in a renewable energy plot with a yield of 9%.With its vast swathes of land and 350 days of sun a year,Spain will offer more opportunities in this sector.What do HNWI investors need to consider when investing directly?Ma

230、drid is a European capital but is cheaper than other cities in Europe.Future potential for rental growth remains in the right locations.Irrespective of asset class,location is key for the long term.In addition,its worth noting that Spanish leases are typically linked to inflation so offer a real hed

231、ge.RESIDENTIAL PRIVATE RENTED SECTORHOTELS&LEISUREUS$3m15mUS$3m15mA boarding house investment in Sydney with 1020 roomsA small pub in Sydney or a larger pub in a regional centreUS$2m33mUS$2m40m5+units outside London,3+units in London15 rooms minimum US$18m30mUS$15m40m30 units in a central locationAr

232、ound 60 rooms in a main cityUS$4m13mUp to US$134m 5+unitsBoutique hotels,generally in the form of heritage shophouses converted for hotel use“Investors in Spain typically make single investments of between 15 million and 25 million and target assets across Europe or further afield,sometimes for curr

233、ency benefits”HomeExplore the latest insights and analysis on prime global residential property performance now and in the future32 PIRI 100 Dubai tops the rankings again in another stellar year for prime market performance38 PEAK PROPERTY What US$1 million buys around the world and the news from Ne

234、w York,the years most active market for sales above US$10 million40 WHERE NEXT?A new cycle for prime residential markets42 CONNECTIONS How Covid-19 redrew the map of global connectivity44 BUYING PATTERNS France is the most diverse European market for property ownership.But where else has global appe

235、al?46 PRIVATE VIEW From lifestyle wins to currency gains,whats driving future HNWI residential property purchases?THE WEALTH REPORT32HOME The post-pandemic spending boom still has legs.Hybrid working is behind the outperformance of sun and ski resorts.Regulations are increasing with foreign buyers a

236、nd prime markets key targets.The slowdown is most evident in Asia-Pacific and city markets.Prime prices declined in only 15 of 100 prime markets tracked.Dubai leads the 2022 annual rankings and our forecast for 2023.At a glancePRIME INTERNATIONAL RESIDENTIAL INDEXTHE RESULTSOf the 100 prime markets

237、tracked in our Prime International Residential Index(PIRI 100),85 recorded positive or flat price growth in 2022.Dubai leads for the second year running,cementing its status as a second home hub for global UHNWIs,assisted by numerous visa initiatives,as discussed on page 10.Resorts outperformed.Coas

238、tal and rural locations in sunnier climes saw average price growth of 8.4%,marginally ahead of ski resorts which were up 8.3%on average,eclipsing their 2021 record.The Americas(7%)narrowly pipped Europe,the Middle East and Africa(6.5%)to the title of top-performing region,with Asia-Pacific trailing

239、on 0.4%.2022 IN CONTEXTLast year we referred to 2021 as “an anomaly”;a year characterised by stellar price growth as markets reopened post-Covid,and revenge spending took hold.Off the back of such a boom,you might be forgiven for thinking 2022 would see a return to business as usual.Far from it.Omit

240、 2021,and 2022 posted the highest level of prime price growth on an annual basis(5.2%)since the global financial crisis(see page 37).But it was a year of two halves.Sentiment shifted gear in mid-2022 as inflation waved goodbye to its transitory status and the cost of debt ramped up,recession loomed,

241、the Ukraine conflict led to rocketing energy prices and stock markets,not to mention crypto,went wobbly.So what was behind the price growth?Wealth preservation,safe-haven capital flight and supply constraints played their part,but the pandemic-induced surge clearly had more left in the tank.Covid-19

242、 underlined the fragility of life and the need for connectivity,and sparked a mass transition to hybrid working.For the worlds wealthy,this increased their appetite to buy,with 17%telling us they added to their portfolios in 2022.PIRI 100Kate Everett-Allen takes the pulse of our unique Prime Interna

243、tional Residential Index,which tracks the performance of prime prices across 100 key city,sun and ski locations.Wheres hot,wheres not and whats influencing prime prices around the globe?THE WEALTH REPORT33HOMESources:All data comes from Knight Franks global network with the exception of Boston,Los A

244、ngeles,Miami,San Diego,San Francisco(S&P CoreLogic Case-Shiller);Frankfurt(Ziegert Research&ImmobilienScout 24);Hawaii(Hawaii Life);Jersey(States of Jersey);New York(StreetEasy);Mexico(Sociedad Hipotecaria Federal);Oslo(Advokat Ek,Oslo);So Paulo and Rio de Janeiro(Fundao Instituto de Pesquisas Econm

245、icas);Stockholm(Svensk Mklarstatistik AB);Toronto(Toronto Real Estate Board);Vancouver(Vancouver Real Estate Board);Tokyo(Ken Corporation)Notes:Price changes are measured in local currency and correspond to the period between 31 December 2021 and 31 December 2022 unless otherwise stated.Algarve,Amst

246、erdam,Athens,Brussels,Buenos Aires,Cyprus,Jersey,Mallorca,Marbella,Marrakesh,Mexico City,Prague,Riyadh and Toronto to Q3 2022.Boston,Los Angeles,Miami,San Diego and San Francisco to October 2022.Tokyo relates to all properties above 100m 1.44.2%DUBAI 2.27.6%ASPEN 3.25.0%RIYADH 4.22.8%TOKYO 5.21.6%MI

247、AMI 6.16.3%PRAGUE 7.15.3%ALGARVE 8.15.0%BAHAMAS 9.13.0%ATHENS 10.12.7%PORTO 11.12.7%HAMPTONS =12.12.0%SARDINIA =12.12.0%MUSTIQUE =12.12.0%ST BARTS =12.12.0%PROVENCE 16.10.5%ZURICH =17.10.0%ST MORITZ =17.10.0%CAYMAN ISLANDS =17.10.0%CANNES =17.10.0%VERBIER 21.9.3%SAN DIEGO 22.9.0%ST TROPEZ 23.8.9%JER

248、SEY 24.8.5%AMSTERDAM 25.8.3%BOSTON =26.8.0%EDINBURGH =26.8.0%LUCCA =26.8.0%SAINT-JEAN-CAP-FERRAT =26.8.0%LAKE COMO 30.7.9%LOS ANGELES 31.7.3%CAPE TOWN 32.7.1%MARBELLA 33.7.0%BARCELONA 34.6.8%DUBLIN 35.6.6%MEXICO CITY 36.6.5%GSTAAD 37.6.4%MUMBAI 38.6.3%PHUKET 39.6.2%PARIS =40.6.0%LISBON =40.6.0%FLORE

249、NCE =40.6.0%MADRID =40.6.0%VAL DISRE 44.5.8%BANGKOK 45.5.7%MALLORCA 46.5.4%BRUSSELS 47.5.1%SO PAULO =48.5.0%HOUSTON =48.5.0%BARBADOS =48.5.0%BRITISH VIRGIN ISLANDS =48.5.0%ROME =48.5.0%COURCHEVEL 53.4.5%JEDDAH =54.4.1%TORONTO =54.4.1%GOLD COAST =56.4.0%MEGVE =56.4.0%VENICE 58.3.9%SINGAPORE =59.3.8%B

250、EIJING =59.3.8%NAIROBI 61.3.5%MELBOURNE 62.3.5%CYPRUS =63.3.0%CHAMONIX =63.3.0%GENEVA =63.3.0%BENGALURU 66.2.8%SHANGHAI 67.2.7%NEW YORK =68.2.5%BERLIN =68.2.5%MILAN =68.2.5%OXFORD =68.2.5%MRIBEL 72.2.4%BUCHAREST 73.2.2%RIO DE JANEIRO 74.1.9%VIENNA 75.1.5%LONDON 76.1.3%PERTH 77.1.2%DELHI 78.1.1%SYDNE

251、Y 79.0.9%JAKARTA 80.0.8%MARRAKESH 81.0.7%SAN FRANCISCO 82.0.2%BRISBANE 83.0.1%KUALA LUMPUR =84.0.0%IBIZA =84.0.0%LAUSANNE 86.-0.4%GUANGZHOU =87.-0.7%HAWAII =87.-0.7%TAIPEI =89.-1.6%MANILA =89.-1.6%HONG KONG 91.-2.4%OSLO 92.-3.8%MONACO 93.-4.6%SEOUL 94.-6.9%SHENZHEN 95.-7.4%VANCOUVER 96.-7.7%STOCKHOL

252、M 97.-9.8%BUENOS AIRES 98.-10.6%FRANKFURT 99.-19.0%AUCKLAND 100.-23.7%WELLINGTON ANNUAL CHANGE IN LUXURY RESIDENTIAL PRICES IN 2022:GLOBAL TOP 5AVERAGE ANNUAL CHANGE BY MARKET TYPEAVERAGE ANNUAL CHANGE BY WORLD REGIONCITY 4.2%AMERICAS 7.0%SUN 8.4%EMEA 6.5%SKI 8.3%ASIA-PACIFIC 0.4%DUBAI 44.2%ASPEN 27

253、.6%RIYADH 25.0%TOKYO 22.8%MIAMI 21.6%TOP 5DUBAI RIYADH TOKYO MIAMI PRAGUE TOP 5 ASPEN MIAMI BAHAMAS HAMPTONS MUSTIQUE TOP 5DUBAI MIAMI ALGARVE BAHAMAS ATHENS TOP 5DUBAI RIYADH PRAGUE ALGARVE ATHENS TOP 5ASPEN ST MORITZ VERBIER GSTAAD VAL DISRE TOP 5TOKYO MUMBAI PHUKET BANGKOK GOLD COAST THE WEALTH R

254、EPORT34HOMECooling markets Cities are feeling the brunt more than resorts,but even here markets are deflating,not collapsing.This isnt 2008.Nonetheless,the transition from a sellers to a buyers market is well under way,though limited prime stock in several major cities,exacerbated by the pandemic,is

255、 putting a floor under luxury prices.With several economies potentially past their inflation peak and hence nearing the end of their monetary tightening phase all eyes will turn to the resilience of labour markets.As yet,forced sellers have been notable by their absence.“Markets registering the stro

256、ngest price growth during the pandemic are amongst the biggest fallers”Miami Health and wellness on tapSome prime markets are feeling the effects of the changing macroeconomic landscape more than others.Fifteen saw prime prices decline in 2022,up from seven in 2021.Almost half of those falling in 20

257、22 were in Asia-Pacific.Markets registering the strongest price growth during the pandemic are among the biggest fallers:Wellington(-24%);Auckland(-19%);Stockholm(-8%);Vancouver(-7%);and Seoul(-5%).Price growth is slowing but its not a uniform picture,as our analysis revealsMeasuring the slowdownAve

258、rage annual%change by property typeAverage annual%change by world regionSource:Knight Frank ResearchCITYSUNSKI8.4%4.2%10.2%8.4%7.2%8.3%AMERICASEMEAASIA-PACIFIC12.7%7.0%7.2%6.5%7.5%0.4%2021202235THE WEALTH REPORTHOMEThe rise of the resortThe transition to hybrid working,and the desire for a better wo

259、rklife balance following the pandemic,has put resorts back in the spotlightCOOLING Canada:A two-year ban on non-residents purchasing residential property came into effect on 1 January 2023.Temporary residents and international students are excluded from the measure.Los Angeles:From 1 April 2023,a ne

260、w mansion tax will be introduced.Properties priced above US$5 million will incur an additional 4%tax,rising to 5.5%on sales above US$10 million.Singapore:From 30 September 2022,tighter loan-to-value rules were applied to some mortgages and private homeowners must now wait 15 months after selling bef

261、ore they can buy a Housing Board resale flat.Australia:From 29 July 2022,the application fee payable by non-residents purchasing residential property doubled.Fees now range from A$4,000 to A$1,045,000 depending on the value of the property at the time of sale.Spain:Billed as a temporary measure,a ne

262、w“Solidarity Tax”is being levied on net assets of 3 million-plus,although Spanish resident taxpayers may apply a 700,000 reduction and an additional 300,000 is deductible for primary residences.SUPPORTING UK:From 23 September 2022,the nil rate of Stamp Duty Land Tax increased from 125,000 to 250,000

263、.The measure is due to come to an end on 31 March 2025.Thailand:In September 2022,a new Long-Term Residency Visa programme was introduced offering an extendable 10-year residence visa plus work permit.The aim is to attract one million wealthy non-residents over the next five years.UAE:From October 2

264、022,individuals can apply for a new five-year self-sponsorship visa,including residency permits for immediate family members.The need for an Emirati sponsor for 122 business activities has been removed.Hong Kong:January 2023 saw the introduction of tax concessions for investments managed by eligible

265、 family offices.Two-year visas are on offer to individuals earning HK$2.5 million-plus(US$320,200)and graduates of the worlds top 100 universities.Singapore:A new five-year visa programme was launched in January 2023 for those earning at least S$30,000(US$22,300)per month in fields such as technolog

266、y and finance,and grants their spouses eligibility to work.Push and pull Weve handpicked a selection of policy measures that influenced the performance of housing markets globally in 2022 and those earmarked for 2023In 2022,resorts shone bright,be they sun or ski locations.Averaging more than 8%annu

267、al price growth,it was a global trend,from Dubai to Miami and most markets in between.According to Mark Harvey,Knight Franks Head of International Sales,“Markets such as Provence,Tuscany,the French Alps and Barbados have been among our hotspots with no let-up in enquiries in 2022.”Mark adds:“The pan

268、demic focused peoples minds on living for today.The transition to hybrid working or,for some,early retirement,made the dream of a bolthole or an upgrade of their existing second home a reality.”Currency was a catalyst for some,with dollar and dollar-pegged buyers seeing double-digit discounts in the

269、 euro zone due to currency shifts alone in 2022.The volatile performance of alternative asset classes and the futility of leaving large sums in the bank motivated others.Although supply in most resorts is slowly recovering from pandemic lows,it has yet to return to pre-2019 levels.Limited prime stoc

270、k prompted quicker decision-making among buyers in 2022.The discretionary status of the second home market means its fundamentals differ from mainstream housing markets.A higher proportion of cash buyers lessens,although doesnt eliminate,its exposure to escalating mortgage costs.For those reliant on

271、 finance,few are likely to sell or downsize when a move will incur a steep rise in monthly payments.Maximising rental income in the interim as a hedge against inflation will be their priority.“Although supply in most resorts is slowly recovering from pandemic lows,it has yet to return to pre-2019 le

272、vels”36HOME3.75 250trn15%28%EXPANDING PORTFOLIOS The average number of homes owned by UHNWIs globally in 2022,up from 2.9 the previous year.Middle Eastern and Asian UHNWIs own the most properties averaging 5.3 and 3.9 respectively.GO WESTIn 2023,the top five overseas markets UHNWIs are most likely t

273、o invest in include the US,UK,Australia,Spain and France.The wealthy are targeting markets offering lifestyle benefits along with currency diversification,stable political governance and high levels of transparency.NO.1 ASSET CLASSThe estimated total value of homes worldwide in US dollars,the worlds

274、 biggest and most influential asset class,accounting for half of all wealth.By way of comparison,stock markets are worth a mere US$90 trillion.BUYER APPETITEThe percentage of UHNWIs who plan to buy a home in 2023,down from the 17%who purchased in 2022.Among UHNWIs in the Middle East,though,the figur

275、e rises well above the global average to 21%.OVERSEAS ASSETSThe share of residential property owned by UHNWIs outside their country of residence but there are big regional variations.For Australasians the figure is 12%,jumping to 35%for those based in the Americas and 42%among Middle Eastern UHNWIs.

276、Prime numbersWe reveal some of the key findings from this years Attitudes Survey underlining how UHNWI investment plans are changingTHE WEALTH REPORT36Sources:The Wealth Report Attitudes Survey,The EconomistAttitudes SurveyTHE WEALTH REPORT37HOME2022 in perspectiveAverage annual%change across the PI

277、RI 100 markets8.0%10.0%6.0%4.0%2.0%0.0%-2.0%-4.0%-6.0%2008 -0.2%2015 1.8%2011 0.1%2018 1.3%2009 -5.5%2016 1.4%2012 0.3%2019 1.8%2010 1.0%2017 2.1%2013 2.8%2014 2.2%2020 1.9%2021 8.4%2022 5.2%Source:Knight Frank ResearchTaking the long viewKate Everett-Allen looks back at the performance of the PIRI

278、100 over the past decade and moreSince 2010 marginal shifts,most of them up,have been the order of the day for prime prices.Annual price growth in the decade before Covid-19 was unspectacular but steady,averaging 1.6%.The unexpected pandemic surge marked the biggest leap since the PIRI 100 began in

279、2008.Prime prices jumped an average 5.2%in 2022 and now sit 35%above their financial crisis low.But markets have lost some of their pre-pandemic synchronicity.In 2019,19 percentage points separated the strongest and weakest performers;in 2022,it was 68.A more nuanced landscape is emerging as countri

280、es adopt different monetary policy strategies,introduce taxes or buyer restrictions and,in some cases,deal with the impact of protracted border closures.01.New York The Big Apple is still a big hit with global investors02.Chamonix Mountain living scales new heights0102THE WEALTH REPORT38HOMESO PAULO

281、 231CAPE TOWN 218MUMBAI 113DUBAI 105MADRID 106MELBOURNE 87BERLIN 70MIAMI 64BEIJING 58TOKYO 60PARIS 43LOS ANGELES 39SYDNEY 44SHANGHAI 44LONDON 34GENEVA 37SINGAPORE 34NEW YORK 33HONG KONG 21MONACO 17LOCATION SQ M/US$1M 100 SQ MBang for your buckSeeking value or simply interested in which city is the m

282、ost expensive in the world?Our PIRI pagoda calculates how far US$1 million will stretch when it comes to prime residential propertyRelative valuesHow many square metres of prime property US$1m buys in selected citiesSources:Knight Frank Research,Douglas Elliman,Ken Corporation Note:Exchange rate as

283、at 30 December 2022Monaco holds on to its title as the most expensive residential market globally.However,in 2022,the strong currency rewarded the US dollar-based buyer with two extra square metres for their money compared with a year ago.New York(33 sq m)has leapfrogged London(34 sq m),again due to

284、 the strength of the greenback,making it the third priciest city,although the two cities along with Singapore(34 sq m)are pretty evenly tied.Dubais 44%annual price growth may conjure up notions of lofty prices,but values are rising from a low base.Here,US$1 million buys 105 sq m,five times as much s

285、pace as in Hong Kong.For real value,head to Cape Town or So Paulo where the same budget bestows more than 200 sq m.THE WEALTH REPORT39HOMEThe pandemic-induced boom in prime,super-prime and ultra-prime markets globally continued into 2022.Some 1,392 sales were transacted at or above US$10 million acr

286、oss 10 global markets.While this represents a decline compared with the record-breaking 2,076 transactions recorded in 2021,it is still 49%above 2019 levels and equates to US$26.3 billion in sales.New York retained its crown as the most active super-prime market with 244 sales of US$10 million or mo

287、re.Los Angeles and London complete the top three with 225 and 223 respectively.The scale of activity in the US super-prime markets aligns with prime price growth in the PIRI 100(see page 32).As with many market segments,the second half of 2022 saw a slowdown in transactions as the cost of debt rose

288、and talk of recession began to enter the daily vocabulary.However,the decline was moderate with 44%of transactions happening in the final six months.Surprisingly,European cities were most resilient.Both Geneva and Paris saw their super-prime sales grow and Londons sales numbers dipped marginally wit

289、h only two fewer than 2021.The UK capital,which shares the top spot with New York in the ultra-prime segment,recorded 43 sales of US$25 million or more the highest level since 2014.After the anomaly of 2021,2022 was something of a transitional year.Some pandemic trends continued to play out,while mo

290、unting headwinds prompted some to reflect on their assets and investment strategies.In 2023,it is likely we will see this process of normalisation continue as transaction levels revert to pre-pandemic levels,down on the past two years but still highly active.Topping outActivity at the top end of res

291、idential markets remained elevated from pre-pandemic levels in 2022 after a record-breaking 2021.Flora Harley examines the resilience of super-and ultra-prime markets,even in the face of rising interest rates and economic uncertaintySources:Knight Frank Research,Douglas Elliman,Naef Prestige,HM Land

292、 Registry,LonResNote:Exchange rate calculated as at 30 December 2022High-end activityThe number of sales in super-prime(US$10m+)and ultra-prime(US$25m+)market segments across 10 global locationsSuper-primeUltra-prime25020015010050HONG KONGSINGAPORESYDNEYGENEVAPARISLOS ANGELESPALM BEACH AND BROWARDNE

293、W YORKLONDONMIAMIUS$26.3bnSuper-primeUS$9.8bn Ultra-primeTOTAL VOLUME24422522379969233394376THE WEALTH REPORT40The tide is turning,and property markets are recalibrating,as homeowners take stock of the changing macroeconomic landscape.Across the 25 cities tracked,Knight Franks

294、global research network now expects prime prices to rise by 2%on average in 2023,down only marginally from the 2.7%we predicted in mid-2022.The slowdown will be far from uniform.Some cities will see annual price growth shift into single digits,while some will see it move into negative territory.Yet

295、15 of the 25 cities tracked still expect prime prices to increase in 2023,down from 18 a year ago.Dubai leads the forecast with prime prices forecast to climb 13.5%in 2023,its relative affordability,broadening global appeal and accessibility a key draw.The US cities of Miami and Los Angeles occupy s

296、econd and joint third spots respectively,with both markets still benefiting from the post-pandemic reassessment of lifestyles.Six of the top ten positions are held by European cities with domestic safe-haven capital flight and strong overseas demand due to the weak euro proving key market drivers.A

297、NEW CYCLECapital Economics identifies four phases in its anatomy of a housing market slowdown.Buyer sentiment takes a hit first,followed by buyer enquiries.Then developers pull on the brakes and sales weaken before,finally,prices feel the pinch.Kate Everett-Allen assesses what lies ahead for the wor

298、lds top residential markets and the trends set to shape their performanceWhere next?1.The performance of prime and mainstream housing markets will detach due to the higher cost of debt.2.Chinas property market will remain tightly controlled despite the relaxation of developer credit lines.3.Taxes an

299、d regulation will increase.4.Inventory in the prime sector will remain low as would-be sellers sit tight and construction slows.5.Interest rate changes will influence currency shifts,presenting risks and opportunities.Key trends to monitorPrime price forecastLocations expected to see an increase in

300、2023,ranked by annual%49%Average proportion of cash buyers across the 25 cities tracked in Knight Franks prime forecastDUBLIN 4.0LISBON 4.0LOS ANGELES 4.0MADRID 4.0PARIS 4.0SINGAPORE 4.0ZURICH 3.5MONACO 3.0MUMBAI 3.0NEW YORK 2.0SHANGHAI 3.0TOKYO 2.0VIENNA 0.5MIAMI 5.013=10=23=10=3=3=13=3=913=3=10=15

301、DUBAI 13.5Sources:Knight Frank Research,Douglas Elliman,Ken CorporationGo online to download the full 25-city forecast WEALTH REPORTInvestment is a key driver of demandThe factors driving HNWI residential property purchases Source:Knight Frank HNW Pulse SurveyINVESTMENTSAFE HAVENLIFESTYLEJOB RELOCAT

302、IONEDUCATIONResidential property considered the safest asset classHow HNWIs rank asset classes for stability (1=safest and least volatile)RESIDENTIAL PROPERTYBONDSGOLDCOMMERCIAL PROPERTYEQUITY MARKETSCRYPTO CURRENCIESHNW Pulse Survey12345645%21%16%9%8%Towering above Dubaisoutperformance isexpected t

303、o continuein 2023Prime markets in most advanced economies are edging from phase three to four.How far prices fall and how protracted a downturn we see will depend on local factors,from economic activity and unemployment levels,to existing supply levels and the proportion of leveraged households in e

304、ach market.Then of course there is the million-dollar question of the future direction of interest rates.If,as many economists suspect,inflation has peaked in most advanced economies and interest rates are close to doing so,cuts may be on the horizon in the second half of 2023,bolstering buyer senti

305、ment.The challenge for agents in most prime markets,both cities and resorts,is lack of stock.Would-be sellers are delaying until interest rates reduce,with some opting to let their properties and take advantage of buoyant rental markets.But headwinds will persist in 2023.The days of ultra-cheap debt

306、 are over.Regulation and taxes are on the increase with non-residents,the prime market and investors firmly in policymakers sights.The reopening of China and the rolling back of its three red lines policy may put its developers on surer footing,but Xi Jinpings goal of“common prosperity”will see pric

307、e inflation closely monitored.With central banks moving at different speeds and potentially in different directions later in 2023,currency volatility will present risks as well as opportunities.“The challenge for agents in most prime markets,both cities and resorts,is lack of stock”Safe as houses Gl

308、obal HNWIs consider residential property to be the safest asset class,according to our HNW Pulse Survey a title usually afforded to gold.Equity markets and crypto both had a rocky 2022,relegating them to fifth and sixth spots respectively.When it comes to the motivation behind their next purchase,HN

309、WIs are focused on investment,particularly those based in Asia-Pacific(62%).For Europeans,however,an improved lifestyle(23%)and safe-haven purchase(19%)rank above the global average.HOMETHE WEALTH REPORT42HOMEAbu DhabiAmsterdamAtlantaBangkokBeijingChengduChicagoDallasDubaiFrankfurtGuangzhouHong Kong

310、IstanbulKuala LumpurLondonLos AngelesMadridMilanMoscowMunichNew YorkOsakaParisRomeSan FranciscoSeoulShanghaiShenzhenSingaporeSydneyTaipeiTel AvivTokyoTorontoViennaWashington DCXianZurichThe worlds most connected citiesRanked by number and quality of flight connectionsWith rolling lockdowns and airpo

311、rt closures,Covid-19 prompted some dramatic shifts in tourist and business activity.Liam Bailey comments on a new view of flight data analysed by Ruth Wetters of Knight Franks Analytics team that pinpoints which cities are becoming more or less critical as world hubs Connections The pandemic undoubt

312、edly redrew the map of global connectivity.Using data on flight connections to and from the worlds 100 biggest airport hubs,our Analytics team was able to analyse and visualise this shift.We took two views to understand this:first,a simple count of connections to other airports;and second,an assessm

313、ent of the quality of these links,i.e.a link to an airport with high onward connections scores higher than an airport with limited connections.Crossing bordersFlight connections in the year to March 2020Sources:Knight Frank Research,WINGXSource:Knight Frank Research,WINGXPre-Covid (12 months to Marc

314、h 2020)London1Beijing2Dubai2Frankfurt4Paris5Hong Kong6Seoul7Tokyo8Istanbul9Amsterdam10Post-Covid (12 months to December 2022)London1Dubai1Frankfurt3Amsterdam4Istanbul5Paris6Tokyo7New York8Seoul9Singapore10THE WEALTH REPORT43HOMEAbu DhabiAmsterdamBangkokBeijingChicagoDallasDubaiFrankfurtGuangzhouHong

315、 KongIstanbulLondonLos AngelesMadridMoscowMunichNew YorkParisRomeSan FranciscoSeoulShanghaiSingaporeTaipeiTel AvivTokyoTorontoWashington DCZurichOn the two network maps the most connected cities are enlarged and pulled to the centre,while those with fewer,weaker connections are pushed to the periphe

316、ry.Cities also gravitate towards their main regional connections.To give a pre-Covid view,we ran the data for the year to March 2020;for a post-Covid update we then ran it again for the year up to December 2022.While a host of other criteria impact on the findings,the pandemic dominates.The clearest

317、 change is the dramatic weakening of the centrality of Chinese cities.With the data covering a period of zero-Covid rules and lockdowns this is hardly surprising,and when we run this data again later in 2023 the impact of Chinas January reopening should become apparent.Other stories emerging include

318、 the relentless rise of Dubai as a global hub,moving from second place in 2020 to joint first with London in 2022.We thought there might be a Brexit-related story in Frankfurt and Amsterdams rise,but this neat assumption was undone by Pariss slip from fifth to sixth place.Istanbuls rise points to Tu

319、rkeys strategic importance,despite ongoing economic turmoil.Finally,Singapores arrival in our top 10 for 2022 underlines the city-states steadily increasing global significance,a trend we pointed to in The Wealth Report 2022.For more on the growing importance of Dubai and Singapore,turn back to page

320、 10 for insights from some immigration specialists.EUROPEAMERICASASIA-PACIFICMIDDLE EASTLingering lockdownFlight connections in the year to December 2022Source:Knight Frank Research,WINGXTHE WEALTH REPORT44HOMESWITZERLANDSPAIN1UKUK2ITALYFRANCE3FRANCEGERMANY4NETHERLANDSNETHERLANDS5BELGIUMBELGIUM6GERM

321、ANYITALY7UAESWITZERLANDPORTUGALSINGAPORE1UKAUSTRALIA2FRANCEINDIA3NETHERLANDSHONG KONG SAR4USCHINESE MAINLAND5SPAINVIETNAM6INDIAMALAYSIA7BRAZILAUSTRALIAITALY1UKUK2USSWITZERLAND3SINGAPORENETHERLANDS4CHINESE MAINLANDFRANCE5SPAINGERMANY6CANADAUS7HONG KONG SARSPAINSOUTH AFRICAKENYA1UKITALY2GERMANYUK3AUST

322、RIANETHERLANDS4FRANCEBELGIUM5USNEW ZEALAND6BELGIUMUS7CANADAFRANCEFRANCE1UK2SWITZERLAND3NETHERLANDS4BELGIUM5US6GERMANY7CANADADIVERSITY OF OWNERSHIP At a global level our data confirms France as the most international prime residential marketplace,closely followed by Spain.The table below confirms the

323、 top 10 international markets in Europe.Outside Europe,the US is the unsurprising lead in the Americas,South Africa is in pole position in its ability to attract the widest spread of investment into Africa,and Australia is the leading Asia-Pacific investment destination.Buying patternsUnderstanding

324、global property ownership is key to anticipating future investment trends.Using prime residential rental data,Liam Bailey explores patterns of ownership across key global markets1 FRANCE2 SPAIN 3 ITALY4 UK5 GREECE6 SWITZERLAND 7 PORTUGAL8 CROATIA9 IRELAND10 GERMANY WHO OWNS WHERE?Digging deeper into

325、 our data we can identify the lead international owners at country level in a range of key prime markets:THE WEALTH REPORT45HOMERoute des Eaux VivesRue des GrangettesRue des RoisChemin de la CorbireRue du Jardin AlpinRue de NogentilRuisseau de MontgellazRue de BellecteRue des crinsRue des ClarinesRu

326、e du MarquisLES LAVANCHESBELLECTEPETIT MORIONDLA MOURIALES GRANDES COMBESLA CORBIRELES BRIGUESMONTGELLAZSWITZERLANDSPAINUNITED KINGDOMUNITED KINGDOMITALYFRANCEFRANCEGERMANYNETHERLANDSNETHERLANDSBELGIUMBELGIUMGERMANYITALYUNITED ARAB EMIRATESSWITZERLANDPORTUGALSINGAPOREUNITED KINGDOMAUSTRALIAFRANCEIND

327、IANETHERLANDSHONG KONGUNITED STATESCHINASPAINVIETNAMINDIAMALAYSIABRAZILAUSTRALIAITALYUNITED KINGDOMUNITED KINGDOMUNITED STATESSWITZERLANDSINGAPORENETHERLANDSCHINAFRANCESPAINGERMANYCANADAUNITED STATESHONG KONGSPAINFRANCEUNITED KINGDOMSWITZERLANDNETHERLANDSBELGIUMUNITED STATESGERMANYCANADAUNITED STATE

328、SVENEZUELACOLOMBIAPERUBRAZILSOUTH AFRICANAMIBIAZAMBIAANGOLAD.R.CONGOETHIOPIASAUDIARABIAIRANINDIAINDONESIASOUTH KOREACHINAKAZAKHSTANTURKEYUKRAINEPOLANDNORWAYSWEDENFINLANDGREECEMONGOLIARUSSIAJAPANAUSTRALIACHADSUDANNIGERMALIALGERIALIBYAEGYPTTANZANIAARGENTINAMEXICOCANADAVancouverSan FranciscoChicagoMexi

329、co CitySao PauloJohannesburgAccraCairoBaghdadIsanbulMoscowDubaiMumbaiBangkokHong KongNew DelhiShanghaiTokyoBeijingJakartaSingaporeSydneyMelbourneUKFRANCEGERMANYITALYSPAINLondonLos AngelesNew YorkTorontoMilanParisCOURCHEVEL1850COURCHEVEL1550COURCHEVEL1650Source:Knight Frank ResearchSource:Knight Fran

330、k ResearchVALUE MATTERS One factor that jumps out of our analysis is the importance of property pricing in terms of the international mix.In more affordable markets,domestic buyers tend to dominate;in more expensive markets,the importance of international investment rises.COURCHEVEL IN FOCUS Three o

331、f the villages that make up the ski resort of Courchevel 1550,1650 and 1850 rise in value and exclusivity as well as altitude.Our analysis confirms a clear correlation with diversity and density of international demand.Number of propertiesNumber owned by non-French nationalsNumber of countries of or

332、igin of non-French buyersBalearic attractionOur analysis allows us to identify detailed ownership patterns,market by market.This map shows the countries of origin of those owning property worth US$2 million or more in Ibiza,highlighting the importance of northern European owners as well as US buyers

333、Power of threeThe level and diversity of international ownership in three of Courchevels villages“In more expensive markets,the importance of international investment rises”THE WEALTH REPORT46HOME46HOME01Private viewWhat are Private Office clients thinking now,and what do they see as the biggest trends for 2023?Patrick Gower asked our teams on the ground worldwide for their insights ALASDAIR PRITC