The wealth of super-rich Indians is increasing faster than their foreign counterparts. 88% or nearly 9 out of 10 Indian ultra-high-net-worth individuals (UHNWIs) witnessed an increase in wealth in 2022. According to the latest edition of the annual Attitudes Survey of Knight Frank’s, ‘The Wealth Report: Outlook 2023’, 88% of the respondents saw a rise in UHNWI’s wealth in 2022 of which 35% respondents said that Indian UHNWIs saw an increase in their wealth in excess of 10% in 2022.
Globally, respondents opined that an estimated 40% of UHNWI saw a rise in their wealth in 2022 and approximately 15% of respondents noted no change in wealth status in 2022 against the previous year.
When it comes to asset allocation, 84% of the investable wealth of Indian UHNWIs is concentrated between equities, real estate, and bonds. Investments in commercial real estate, either directly or through funds and REITS, make up 25% of the portfolio of Indian UHNWIs.
On average Indian super-rich own 5.1 residential properties compared to the global average of 4.2 units. Around 37% of the total wealth allocation is towards primary and secondary homes by Indian UHNWIs of which 15% allocation towards residential property is held outside India. UHNWIs in India have the greatest appetite, owning an average of five homes each. This demonstrates the unwavering appeal of residential properties.
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Real estate investments by Indian UHNWIs
14% of UHNWIs purchased a home in 2022 and about 10% are expected to make a new home purchase in 2023. Amongst foreign locations United Kingdom, United Arab Emirates and the United States are the most preferred locations for purchasing homes. India and Canada round out the top 5. Office, Logistics & Industrial, Healthcare and Development land are the preferred real estate asset avenues for 2023.
Flora Harley, Partner, Residential Research at Knight Frank says, “Real estate was the top cited opportunity among 46% of Knight Frank’s survey respondents, whether for its attributes as an inflation hedge or due to the benefits of diversification. Many panelists highlighted the opportunity to secure enhanced return profiles as a key advantage. Plus, 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. That trend isn’t limited to real estate either: equities and the technology sector were tipped by around a third of our respondents.”
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In 2022, the Attitudes Survey revealed that, UHNWIs have expanded their orientation from APAC to more global markets in EMEA and Americas.
For most Indians buying a property outside of India, United Kingdoms (UK) was the first preference with 47% respondents showing affinity towards it. This was owing to the fact that UK is a global gateway country and India has business and personal interest in that nation state which has hugely propelled its popularity. Interestingly, the second spot was taken by UAE (41%), becoming a hot spot for Indians to invest. USA (29%) and Canada (18%) were third and fourth placed destinations for investments in property.