Nine out of 10 ultra-high-net-worth individuals in India multiplied their wealth in 2022 much faster than their global counterparts, despite the global cost-of-living crisis and other factors, according to a new report from the real estate consultancy firm Knight Frank. The report highlighted that around 35 per cent of ultra-wealthy in India increased their total wealth by more than 10 per cent.
The ultra-wealthy individuals invested 84 per cent of their investable wealth in equities, real estate, and bonds. The report noted that investments in commercial real estate, either directly or through funds and Real Estate Investment Trusts (REITS), were 25 per cent of their portfolios.
“As India emerges as a market of opportunity which is expected to remain in growth mode despite an impending global slowdown, wealth held by UHNWIs is expected to grow in 2023. The optimism of ultra-wealthy on wealth generation here is far higher than their global counterparts and this shall serve as the bedrock of investment and consumption decision,” said Shishir Baijal, Chairman and Managing Director at Knight Frank.
Globally, the report noted that 40 per cent of ultra-wealthy individuals saw a rise in their wealth in 2022, whereas 15 per cent noted no change in wealth status in 2022 as against 2021.
Real estate appetite of Indians
The report noted that in general Indian ultra-rich class own 5.1 residential properties compared to the global average of 4.2 units. They invested around 37 per cent of the total wealth in primary and secondary homes. Around 15 per cent of them were interested in residential properties outside India. UHNWIs in India have the greatest appetite, owning an average of five homes each.
“The Indian ultra-wealthy have also demonstrated a growing appetite for property compared to global averages and this bodes well for the real estate market. The tumultuous global macro-economic environment and high-interest rates will have its influence on market sentiments, however the new market phase with best-in-class real estate in residential and commercial segments is expected to witness continued demand,” added Baijal of Knight Frank.
Among preferred foreign locations for ultra-rich Indians, the United Kingdom tops the list, followed by the United Arab Emirates and the United States.
“Real estate was the top cited opportunity among 46 per cent of Knight Frank’s survey respondents, whether for its attributes as an inflation hedge or due to the benefits of diversification. When investing directly, real estate enables greater control and value-add opportunities. One in ten respondents specifically cited looking for attractive valuations and distressed opportunities,” said Flora Harley, Partner, Residential Research at Knight Frank.