World's ultra rich hold a fifth of their wealth in real estate

Jan 15 2014, 16:41 IST
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Rich people in Europe hold 31 per cent of their wealth in real estate assets worth USD 2,391 billion. (Thinkstock) Rich people in Europe hold 31 per cent of their wealth in real estate assets worth USD 2,391 billion. (Thinkstock)
SummaryEurope's super rich hold biggest share of all privately owned real estate assets, followed by Asians.

The world's super rich people hold a fifth of their wealth in property, estimated at USD 5,328 billion, while Asia's ultra rich have a greater share in real estate, a report says.

According to international real estate advisor Savills, in association with Wealth-X, property accounts for about a fifth of the invested wealth of almost 200,000 ultra high net worth individuals (UHNWIs) in the world.

Of the total private wealth of USD 27,770 billion, 19 per cent is held in real estate assets amounting to USD 5,328 billion, it said.

Europe's super rich hold the biggest share of all privately owned real estate assets, followed by Asians.

Rich people in Europe hold 31 per cent of their wealth in real estate assets worth USD 2,391 billion, followed by Asia (27 per cent at USD 1,800 billion) and the Middle East (26 per cent at USD 880 billion).

"Global real estate is mostly residential and held by occupiers, but private owners are becoming more important in the world of traded investable property," according to Yolande Barnes, head of Savills world research.

She said that since the North Atlantic debt crisis of 2008, sovereign wealth funds, wealth management companies, private banks and family offices have stepped into property deals that corporate bankers have deserted.

According to Savills, the total value of the world's real estate is now around USD 180 trillion, 72 per cent of which is owner-occupied residential property.

Of the USD 70 trillion that is 'investable' and therefore traded regularly - including USD 20 trillion of commercial property - over half is being bought by private individuals, companies and organisations.

According to Mykolas D Rambus, CEO of Wealth-X, the UHNW population is expected to grow 22 per cent by 2018 and its combined wealth - currently USD 27.8 trillion - is expected to total over USD 36 trillion by 2018.

"This presents huge opportunities for those involved in global real estate investment to create the right product in the right locations," Rambus said.

About 3 per cent of the world's total real estate value, or USD 5.3 trillion, is owned by UHNWIs.

This wealthiest 0.003 per cent of the world's population has real estate holdings which are worth an average of USD 26.5 million each, according to the report.

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