London beats out New York and Paris as the most favoured city of the wealthy, according to London real estate agency Knight Frank.
In Knight Frank’s recent 2022 Wealth Report, the agency compared metropolises across the globe. Measured based on numerous criteria, including ultra-high-net-worth (UHNW) individuals*, investment potential, and lifestyle aspects such as global connections and universities, London was named above all.
London is the most significant city in the world for the rich.
In Knight Frank’s 2022 Wealth Report, London topped the list as the most significant city for the rich, comimg up first in investment and lifestyle categories. While ranking fourth in terms of the size of its rich population and remains a worldwide centre for UHNWs, with a population valued at US$30 million, surpassing economic capitals New York, Tokyo, and Paris. Los Angeles was ranked fifth, followed by Hong Kong and Beijing coming in sixth and seventh.
According to their reports from the previous year, London’s growth also including population size by an increase of 8.5% from 2021. Another indicator of higher growth for the big city.
London also saw more cross-border private capital investments in real estate compared to any other city in the world, with over US$3 billion spent. While in 2021, cross-border investment accounted for 53% of all private money spent in real estate in London.On the other hand, the aggregate amount of private money spent in real estate in US cities was far and by the highest, yet more than 95% was a domestic investment.
In 2021, London saw more than US$3 billion in cross-border private capital real estate investment.
Based on Knight Frank’s estimations, this frenzy of activity will continue in 2022, with 23% of UHNWs planning to engage directly in commercial real estate and 20% planning to invest indirectly.
From these findings, they also assume that this private money will most likely concentrate on office property, as clients become increasingly interested in logistics and healthcare property investment.
Alex James, head of private client commercial advisory at Knight Frank says, “Amid the record levels of private capital deployed in 2021, UNHWIs continue to recognize commercial real estate as a resilient investment”. He further quoted, “Our forecasts indicate that investor appetite will remain undimmed in 2022”.
The UK is projected to dominate once again, with a forecast of US$24 billion in cross-border private capital investment in 2022. London’s supremacy in this field stems in part from its leadership in green-rated buildings, since Environmental, Social, and Governance (ESG) remains a decisive factor for investors, as well as London’s international investor base.
London ranks second among European prime residential cities in terms of the number of countries represented among investors. Investors in quality residential property in London come from 45 different nations, with only Provence, France, taking first place.
London boasts one of Europe’s most geographically varied property investment bases.
After a challenging two years for the London housing market, premier property in the UK capital is expected to have a robust return in 2022. Across the waters, Dubai, Zurich, and Miami are expected to gain significantly in yields in 2022, following on from their spectacular rise in 2021.
London is expected to increase at a rate of 7% in the following year.
*The real estate agency from London defines UHNWs as those having a net worth of more than US$30 million, whereas High Net Worths (HNWs) have a net worth of more than US$1 million.