Dubai: COVID-19 did have an impact on the UAE’s super-wealthy, shrinking the size of their assets and the funds they could invest. Much the same happened in Qatar – but Saudi Arabia was the exception and actually recorded an increase in the ranks of those who had assets of those with $30 million and more.
These are according to the latest findings by the UK-based real estate consultancy Knight Frank in its annual The Wealth Report, which released on Wednesday (February 24).
So, last year, there 1,305 ‘ultra-high networth individuals’ (UHNWIs) in the UAE, which Knight Frank defines as those who hold $30 million plus in assets or funds they can deploy in picking up new ones. But that’s against 2019’s tally of 1,663 individuals who had that kind of wealth.
The same happened with the country’s millionaires, those with $1 million and more to invest. Last year, there were 155,929 such individuals, but is a decline from 2019’s 193,641. Obviously, disruption from the pandemic on their business and investment prospects impacted on the value of the wealth they hold.
It was the case for much of the region and wider Asia as well.
$30millionThose with $30 million and more to spend on assets are defined as ultra-high networth individuals in Knight Frank's rankings
“The pandemic impacted the fortunes of many in the Middle East, and Middle Eastern HNWIs and UHNWIs were not spared, with the total number of each decreasing by 11.3 per cent and 10.1 per cent, respectively,” said Taimur Khan, Head of Research at Knight Frank Middle East.
“However, this decline was not uniform across all countries. In Saudi Arabia over this period, the number of UHNWIs increased by 9.6 per cent - the 10th fastest growth rate globally. In fact, its UHNW population has grown by 227 per cent over the last five years, the fastest growth rate globally over this period. (Saudi Arabia's year-end tally for UNHWIs was 7,020, after another 617 joined in.)
“As the region continues its various economic diversification programmes we expect that there will continue to be significant growth in the number of HNWI, UHNWI and billionaires residing in the region.”
Visa, residency changes
The UAE has brought in significant changes to its long-term residency options – through investment in high-end real estate - as well as in the granting of citizenship rights to select individuals, including prominent investors. Plus, there is also special focus on attracting top professional talent as well as those who would consider basing themselves in the UAE after retirement.
These initiatives, plus a turnaround for the economy, will see a rebound in the ranks of the country’s rich. Knight Frank estimates that by 2025, there will be 1,593 super-wealthy individuals in-country.
“The Middle East is expected to remain as the world’s fourth largest wealth hub,” said Henry Faun, Partner at Knight Frank Private Office, Middle East. “This reinforces the Middle East as a globally significant centre for wealthy individuals looking ahead.”
- Asia will likely to see the largest rise in the number of UHNWIs with growth of 39 per cent, led by Indonesia (67%) and India (63%) by 2025.
- Europe will retain its crown as the second largest wealth hub with expected growth of 23%, bringing the total number of UHNWIs to 185,860. The biggest rises in Europe are forecast in Poland (61%) and Sweden (59%).
- In the Middle East, the number of UHNWIs will likely increase by 24.6% in these five years.
Doing well… despite COVID-19
Now, there were individuals and countries that still did well despite having the pandemic to contend with. There was a 2.4 per cent increase in the number of UHNWIs worldwide, and raising their total to 520,000. China had the highest increase - 9,594 additional UHNWIs - followed by the US (6,080) and Japan (1,199). Keep in mind that through the better part of 2020, stock markets were trending higher… much higher.