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Asia’s ultra-rich reap the rewards of real estate

​​​​​​​​​​​​​​30​​​​​​​​​​​​​​​​​​​​ Sep 2014

Asia's ultra-rich reap the rewards of real estate

The number of billionaires around the world has hit an all-time high, according to the latest Wealth X/UBS billionaire census with real estate ranking third as the biggest driver of wealth.


The figures, released last week, show that there are 2,325 people globally with a net worth of at least US$1 billion, 7 per cent more than in 2013.

Overall, real estate ranked third as the top money-making industry, behind industrial enterprises and banking & finance, and Hong Kong is home to more real estate billionaires than anywhere else with 24 per cent acquiring their wealth through property.

Across Asia, the total billionaire pool of wealth grew to US$1,410 billion and, on average, 3 per cent (US$94 million per individual) is held in real estate.

"UHNWs have always favoured real estate as an asset class but, recently, we have seen more activity from Asian UHNWs in cross border deals both within the region and globally," said Alistair Meadows, Head of JLL’s International Capital Group in Asia Pacific.

"For trophy assets they will now often compete against institutional investors and outbid them. For example, the sale of Grand Park Orchard in Singapore for circa $900 million to an UHNW individual, illustrates the demand for super prime retail and hotel assets with a coveted address," he added.

But, while Asia's billionaires accounted for almost 30 per cent of the global billionaire wealth growth this year, the region's mega-rich remain relatively cash-poor compared with billionaires in Europe and the US, holding just 16 per cent of their net worth in liquid assets.

"Many of the world's UHNWs control diversified conglomerates which generate significant excess cash flow annually in a low interest rate environment. Investing this excess cash flow into direct real estate with recurring income has proved to be particularly attractive in recent times. We're finding that it's the key global gateway cities that attract the most UHNW capital, mainly for wealth preservation purposes," said Meadows.

The second edition of the Wealth X/UBS global billionaire census highlights Europe as home to the most billionaires (775), followed by North America (609) and Asia (560).  The US counted 56 new billionaires this year, with a total of 571, and China came in second with 190 billionaires (up from 157 in 2013).