In his report on world-class real estate, Barnes and Warburg studied the behavior and trends of High-Net-Worth Individuals (UHNWI), individuals or ultra-wealthy families who have the ability to acquire residences on several continents, for both personal and professional purposes.
According to the survey conducted by Wealth-X for the network of high-end international agencies, these UHNWIs, who each have more than $ 30 million, would 212 615 currently in the world of which 10 % hold 5 properties or more. In 2018, the number of UHNWIs will exceed 318 000 and the value of accumulated wealth could reach 46,300 billion in 2020.
The interests of wealthy buyers for prestige property
The report puts forward three engines that guide the real estate choices of these ultra-rich: the share of emotion, the financial aspect and practical reasons. For the emotional side Even if the acquisition is made in order to make a pure investment, the purchaser will appreciate the property as if it were his own residence. He will be even more attentive if he plans to stay there one day "Barnes says. If the affective criteria are personal, the study states " there is often consensus on the criteria of size and volume, the history of the residence, the location and the external environment, the style and design, the quality of the construction and also the view. The architectural identity and reputation of a neighborhood often arouse the interest of wealthy buyers. In practice, the purchase of property for children or grandchildren as part of their studies are particularly preferred.
Passionate and rational criteria
The choice of a prestigious real estate investment by the HNWI is based on passionate criteria, but also rational. The convergence of these two criteria creates a decision cycle that increases the attractiveness of the property and encourages placement in the stone. " Beyond the expectation of performance, our clients want to make an investment that will, in a few years, be worth more than todaySaid Adam Redolfi, one of Barnes' leaders. The ideal property for HNWI must " enjoy a beautiful location, enjoy excellent local services and be unique, whether in terms of benefits or history. All of these criteria must be met because affluent investors do not compromise when looking for a prestigious residence.Adds the report.
The digital revolution
The acquisition of real estate properties responds to a global investment strategy. " Investing internationally in high-end real estate by arbitrating its investments is a basic principle of sound management of its real estate assets. Three main reasons explain this phenomenon: the improvement of the means of transport, notably by air, the technological revolution with the generalization of the digital; the evolution of the world of work, which has become global and without frontiers ". Thibaut de Saint Vincent, President of Barnes is categorical: " the HNWI population no longer limits its investments in its country or on its continent but globalises its sites, shelters its heritage and remains attentive to new opportunities ".
London, city acclaimed
In the ranking of most searched cities by wealthy clients for a real estate investment, London comes first New York, Tokyo, Sydney and Paris. London's first place is justified by its excellent results in most indicators such as cultural wealth, prestigious brands, education, mobility, limited risk investment, the proliferation of companies and the concentration of UHNWI living in the city. The London real estate market remains one of the most expensive in the world, reaching 50 000 € at 60 000 € per square meter for exceptional real estate. However, lower prices in the order of 15 % in 2016, coupled with the depreciation of the pound sterling following Brexit, could however favor foreign investment in London in 2017.
Paris in 5th position
In the report, Paris is appreciated for its luxury brands, its cultural wealth, its air networks and the strong presence of ultra rich. On the other hand, it is less well positioned on the criteria of security and the ease of setting up companies. " A particularly heavy property taxation penalizes it even if Paris benefits from an excellent quality-price ratio with reasonable market values. According to the study, the views of parks and gardens, monuments or the Seine are very popular with the wealthy international clientele. Families are looking for large apartments or mansions close to good schools and green spaces. " Paris is a flagship destination for investors. We are planning a catch-up of Paris on London or New York with a horizon of three to five years"Warns Richard Tzipine, CEO of Barnes.
Cuba, Lisbon and Berlin, destinations of the future
With the end of the embargo, Cuba becomes very attractive. " Investors around the world are flocking to the island with big projects before the Americans can invest heavily there from 2018. For his part, Lisbon is listed with its temperate Mediterranean climate, its numerous air networks and its tax incentive for foreigners who settle there. Portugal attracts the French who are more than three thousand to live there each year. Berlin has great investment opportunities. " The contributionof the technology sector has led to the biggest wave of office development that the German city has ever known. Highlights the investigation. Come next, Taos (USA), Tel Aviv (Israel), The cap (South Africa) and Auckland (New Zealand) among the destinations of tomorrow.
© Article written by Olivier Marin for The Figaro Properties.
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