India’s ultra rich prefer to invest in property

Mumbai: Mumbai is ranked 16 among 40 global cities labelled important to ultra-high-net-worth individuals (UHNWI) whose numbers are expected to go up rapidly in the next decade only to be followed by Delhi and Hyderabad.

According to global real estate consultancy Knight Frank’s 9th edition of the Wealth Report, India’s UHNWI ranking shall improve from 20th in 2014 to 19th by 2024 and the country’s top six cities will contribute 58 per cent of the total of these ultra rich individuals in the country. This number will further rise to 68 per cent by 2024.

The Wealth Report, a yearly issue, provides an insight in to the attitudes of these individuals towards property, investments and spending patterns across the globe and provides an annual analysis of wealth flow and property investment around the world.

Speaking about the findings of the report released here, Shishir Baijal, Chairman and Managing Director, Knight Frank India said: “Wealth creation in India is expected to accelerate with the number of UHNWIs expected to double over the next decade. This reflects a more positive outlook for India’s economy after 2014 was marked by capital outflows and sharp devaluation of the rupee.”

Samantak Das, Chief Economist & Director, Knight Frank India, added, “Indian UHNWIs have given a positive outlook towards wealth creation and their decisions relating to the purchase of real estate property. Although not purely for investment purpose, a quarter of Indian UHNWIs are contemplating purchase of another home in 2015.

“In spite of the Government of India taking bold steps towards financial inclusion, wealth concentration continues to remain a challenge. At 0.1 UHNWI per 100,000 population, Indian ranks a distant 84 among 97 countries globally in terms of equitable distribution of wealth.”

The report states that nearly half of the Indian UHNWIs’ investment portfolios are allocated to property, the highest across the globe, followed by the Australians at 42 per cent. Globally, Bengaluru is among the limited number of property markets that witnessed double digit price growth.

And globally, Mumbai is costlier than Dubai in terms of buying prime residential property where the price is Rs61,300 per sq ft as compared to Dubai’s Rs40,455 per sq ft. Delhi’s prime residential prices are Rs33,400 per sq ft and Bengaluru Rs18,600. The most expensive properties are Monaco at Rs339,723 per sq ft and Hong Kong at Rs293,944 per sq ft followed by London and New York.

The Report also indicates that investments of passion are becoming more popular with watches, art and jewellery being the top draws for wealthy Indians.