The global perspective on prime property & investment - 16th edition 2022
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The global perspective on prime property & investment 16th edition — 2022
TH E WEA LTH REPORT 2 0 2 2 T H E W EALT H REPORT 2 022 1
Welcome
16th edition Definitions and data How we chose our cover
Editor HNWI
Andrew Shirley
High-net-worth individual – someone with a net worth of
Rory Penn – Head of Knight Frank Private Office
Deputy Editor US$1 million or more, including their primary residence.
Flora Harley
UHNWI
By any of the measures that we track, whether luxury
Global Head
of Research Ultra-high-net-worth individual – someone with a net worth of property prices, UHNWI populations or even private
Liam Bailey US$30 million or more, including their primary residence.
jet traffic, 2021 was a good year for those lucky enough
The global perspective on
prime property & investment
16th edition — 2022
2022 WR_2022_v34 MASTER.indd 1 31/01/2022 17:08
—
Prime property The world is still enduring a period of significant disruption, so more to be the owners of property or other tangible assets
Written by The most desirable and most expensive property in a given than ever this year’s edition of The Wealth Report needed to cut
Knight Frank location, generally defined as the top 5% of each market by through the confusion and offer clarity. Reflecting this, our cover
I
Research
value. Prime markets often have a significant international bias concept builds on the notion of chaos and noise coming together am delighted to welcome you to the
Thusal Bennett in terms of buyer profile. seamlessly. We drew inspiration from nature – notably how starlings 16th edition of The Wealth Report,
James Culley move together en masse in a murmuration creating wonderful and the second to be produced under
Lee Elliott The PIRI 100 – Now in its 15th year, the Knight Frank Prime organic shapes – and also from data and the digital world, a theme we the shadow of Covid-19.
Kate Everett-Allen
International Residential Index tracks movements in luxury discuss in the report. Helped by the subtle foiling effect, the reader’s Notwithstanding uncertain times,
Patrick Gower
Antonia Haralambous prices across the world’s top residential markets. The index, eye is drawn to the QR code so they can continue their journey online. we have still seen substantial wealth creation
Anna Ward compiled using data from our research teams around the world, globally with the number of people with net wealth of
covers major financial centres, gateway cities and second-home US$30 million or more increasing by almost 10%
Project management
hotspots – both coastal and rural – as well as leading luxury last year. We offer our perspective on current trends
Natasha Mistry
re
er mo and opportunities and look to the future to help
iscov
ski resorts.
Marketing D
guide clients through evolving real estate markets.
Lauren Haasz
The Knight Frank Wealth Sizing Model – The model, What has become clear during the pandemic is
THROUGHOUT THE REPORT
Public relations created by our data engineering team, measures the size of that wealth cannot exist in a bubble. We need to be
QR CODES WILL TAKE YOU
Astrid Recaldin HNWI, UHNWI and billionaire cohorts in more than 200 countries SEAMLESSLY TO EXTRA cognisant that inequality levels are increasing, and
and territories. In addition, we model the number of HNWIs CONTENT AND DATA ON that the battle against climate change has reached
— THE WEALTH REPORT’S
and UHNWIs at city level for 100 global cities. NEW DIGITAL PLATFORM what many now regard as a tipping point.
Sub-editing I am therefore pleased that this edition of the
Sunny Creative report features some incredibly thought-provoking
contributions from those at the forefront of the
Design & direction Important notice
Quiddity Media Attitudes
© 2022. All rights reserved. struggle against what are arguably some of the
Survey This publication is produced for general outline information only, it is not definitive and it is
not to be relied upon in any way. Although we believe that high standards have been used in biggest issues facing the world today. From the CEO
Data visualisation the preparation of the information, analysis and views presented, no responsibility or liability
of Prince William’s ground-breaking Earthshot Prize
whatsoever can be accepted by Knight Frank for any errors or loss or damage resultant
Court Three The Attitudes Survey – The 2022 instalment is based on from the use of or reference to the contents of this publication. We make no express or initiative to one of the earliest female technology
implied warranty or guarantee of the accuracy of any of the contents. This publication does
Brand & creative
responses provided during October and November 2021 by more not necessarily reflect the view of Knight Frank in any respect. Information may have been pioneers and philanthropists, to mention just two,
provided by others without verification. Readers should not take or omit to take any action as a
consultant than 600 private bankers, wealth advisors, intermediaries and result of information in this publication. I hope you find their insights as inspiring as I did.
Woven family offices who between them manage over US$3.5 trillion In preparing this publication, Knight Frank does not imply or establish any client, advisory, Technology moves forward ever more rapidly and
financial or professional relationship, nor is Knight Frank or any other person providing
of wealth for UHNWI clients. Special thanks to Absa Kenya, advisory, financial or other services. In particular, Knight Frank LLP is not authorised by the we try to keep up with this by reporting on the brave
Portrait photography Financial Conduct Authority to undertake regulated activities (other than limited insurance
Alfa Bank, Ambit Finance, ANZ Bank Australia, ANZ Bank intermediation activity in connection with property management).
new world of the metaverse and the opportunities
Graham Lee
New Zealand, BritishAmerican Business, Caleo Capital, CIC No part of this publication shall be reproduced, stored in a retrieval system, or transmitted offered by a raft of new crypto investments.
in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
Illustration Insurance, Credit Suisse, Dry Associates, Edelweiss, Forsyth without prior written permission from Knight Frank for the same, including, in the case of Knight Frank also continues to move forward.
reproduction, prior written approval of Knight Frank to the specific form and content within
Stephen Cheetham Barr New Zealand, Genghis Capital Ltd, HSBC Singapore, We are delighted to have expanded our Private Office
which it appears.
ICEA Lion, ICICI Bank, JB Were, Julius Baer, Kairos Capital Pte Knight Frank LLP is a member of an international network of independent firms which may network into New York and Singapore to work
Print use the “Knight Frank” name and/or logos as all or part of their business names. No “Knight
Ltd, Kathrein Privatbank, Komerční Banka, Macquarie Bank, Frank” entity acts as agent for, or has any authority to represent, bind or obligate in any way,
alongside our London and Dubai private client
Optichrome
Maybank Philippines Inc, MERITZ Securities Co Ltd, Motilal any other “Knight Frank” entity. This publication is compiled from information contributed teams, established a new commercial alliance in the
by various sources including Knight Frank LLP, its direct UK subsidiaries and a network of
Oswal, Nabo Capital, National Australia Bank, NCBA Group, NH separate and independent overseas entities or practices offering property services. Together US and set ourselves an ambitious net zero target.
these are generally known as “the Knight Frank global network”. Each entity or practice in
Investment & Securities Co Ltd, Ruffer LLP, Sanlam Kenya, SK the Knight Frank global network is a distinct and separate legal entity. Its ownership and If we can help you achieve any of your targets
management is distinct from that of any other entity or practice, whether operating under the
All Knight Frank contacts: Securities Co Ltd, Stanbic Bank Kenya, Sumitumo Mitsui Trust or aspirations, please do get in touch. The Private
name Knight Frank or otherwise. Where applicable, references to Knight Frank include the
firstname.familyname@ Bank Ltd, UOB Private Bank, Walsh Bay Partners and Westpac Knight Frank global network. Knight Frank LLP is a limited liability partnership registered in Office and wider Knight Frank network would love
England with registered number OC305934, the registered office is 55 Baker Street, London
knightfrank.com for their participation. W1U 8AN, where a list of members’ names may be inspected. to be of assistance.
TH E WEA LTH REPORT 2 0 2 2 2 T H E W EALT H REPORT 2 022 3
Contents
The Wealth Report’s six chapters take you on a unique journey through
Interviews Fast forward
Inspirational and Our special series focused on the future
our index results, expert insights, thought-provoking interviews, future thought-provoking conversations
views and data that help shed light on some of the key issues affecting
how you live, work, invest and give back 6 Tech titans 30 The final property frontier
igital trailblazers Dame Stephanie
D xploring space tourism and
E
Shirley and Yat Siu share their stories the future of real estate
24
Taxing times 46 Let’s get phygital
Erica Payne on her mission to
Where digital meets physical real
persuade millionaires they want estate – enter the metaverse
to pay more tax
12 Performance Opinion & insight
44 The ultimate investment
66
Homes of the future
What will our homes look like
Chapter 1 From prime property to luxury investments, Expert views on the big issues facing Hannah Jones, CEO of The Earthshot in 100 years’ time?
Wealth the results of our regular datasets wealth creators Prize, explains how it could save
the world
80
32
Cities of the future
14 ccumulation, assets
A
and acceleration
18 Inside wealth
90 Saving Nemo
Four new urban centres,
from Saudi Arabia to Mars
Chapter 2 Ten wealth industry experts on their
Analysing global
top tips and biggest risks Natália Perry recounts her long journey
Investing to protect a remote corner of Indonesia
wealth populations
94 Sailing into the metawaves
48 36
Power to the people
26
Unsustainable luxury
Liam Bailey questions whether lavish
The future of the superyacht
Chapter 3 Our data dashboard of private capital
lifestyles stand up to scrutiny
Home trends in commercial property
68 50 The heat is on
34 Building blocks
Two big themes driving investment
Chapter 4 The results of our Prime International decisions: blockchain and property
Cities Residential Index (PIRI 100)
82 40 Around the world in 25 themes
58 Prime predictions
Our forecasts for prime residential
Our global teams share their real
estate investment picks
Meet the contributors
Chapter 5
property in 2022 Get to know more about a selection of this year’s contributors
Passions
43 Future proofing
96 70 Long live the city
Find out which city tops our annual
What is driving ESG-related
property investments?
Chapter 6 City Wealth Index
Flora Harley, Kate Everett-Allen, Antonia Haralambous
Databank
56
The Wealth Report’s Head of International takes a keen interest in
Bright lights
78
Deputy Editor, has a Residential Research, geopolitics and football.
Flying high Second-home ownership trends
Art Coins Rare whisky
passion for economics is a mountain lover She examines private
75 64 428
Private aviation took off in 2021 across Europe and an increasing and photographer who capital and real estate in
interest in the curates the report’s “Power to the people” in
digital world Home chapter our Investing chapter
84 Passion play 60 Home hotspots
13 9 9
Whisky or wine? The results of the Our pick of the neighbourhoods
Knight Frank Luxury Investment Index set to outperform James Culley, our Anna Ward, a Thusal Bennett
Coloured diamonds Furniture
23 19 data science lead, Hispanophile and of our GIS team enjoys
has a fascination for theatre-goer from our applying science to
96 Databank 72 The lion goes green all things Finnish development research spatial data. Lucky, as he
The numbers behind Why Singapore is becoming a hub and crunches the team, polishes her crunched more than 30
2 1
The Wealth Report for wealth and sustainability numbers for our crystal ball in “Homes million data points for our
Wealth Sizing Model of the future” “Bright lights” article
TH E WEA LTH REPORT 2 0 2 2 4 T H E W EALT H REPORT 2 022 5
p14 A WEALTH SURGE… ESG ON THE RISE, AND FINE WINE AND WATCHES
global cryptoasset market worth US$2.4
p4 3 p84
Last year’s global economic rebound trillion at the end of 2021, up 12-fold in UNDER SCRUTINY LUBRICATE INVESTMENT
supercharged wealth creation. under two years. Don’t understand The three letters that increasingly Not to be outdone by prime property,
Worldwide, the number of UHNWIs rose cryptocurrency? Don’t worry – with dominate investment debates have the luxury collectible sector saw a
Key
9.3% over the year, creating an additional 8,000 to choose from, one is bound gone mainstream. Some 80% of wealthy strong performance last year, with
52,000 very wealthy people compared to suit. Indeed, 18% of UHNWIs now investors want more ESG-compliant record-breaking sales volumes at
with just 12 months earlier. This growth own some kind of crypto, 11% have assets, the main reason being to future- the major global auction houses. Our
was evenly spread, with North America invested in non-fungible tokens (NFTs) proof their portfolios – and why not, when Luxury Investment Index was led by
findings
(up 12.2%) just ahead of the regional and more than 60% of Attitudes Survey we report a value premium of up to 18% fine wine and watches, both rising
pack. Only Africa saw a decline in respondents see blockchain technology for the “greenest” offices? The biggest an impressive 16% through the year,
wealth. As we discuss, the growth in as an opportunity. Still not convinced? barrier for future investment is “lack of and the art market delivering double
younger, self-made UHNWIs (21% of We report on a digital Gucci bag that opportunities” – a clear call to action for digit returns at 13%. Digital innovation
the total) will drive new investment sold for more than a real one. If that isn’t developers. Yet with private jet journeys helped to widen the pool of collectors,
themes and innovation. enough, get ready to have an opinion rising 47% in a year (page 78) we provide with the NFT boom encouraging a rise
on the best type of metaverse to protect a timely discussion on the sustainability in new younger market entrants.
… PROMPTS A BACKLASH
Liam Bailey, Knight Frank’s Global Head p20
your digital property (page 9) – open conundrum at the heart of the luxury
With 83% of our Attitudes Survey or closed? business (page 26), but point to some SUPERYACHTS, NEMO,
of Research, shares his key insights from respondents expecting their clients’ hopeful innovations tackling five major
p 94 VOLCANIC CITIES AND
PRIVATE CAPITAL DRIVES MORE…
the 16th edition of The Wealth Report wealth to grow further this year, and
p36 REAL ESTATE INVESTMENT
environmental challenges (page 44).
our expectation of a further 28.3% rise In a packed edition we also find space
T
in global UHNWI numbers by 2026, A growing share of private capital is LUXURY PROPERTY BECOMES to report on the superyacht boom;
p50 THE INVESTMENT SECTOR
he Wealth Report’s objective is to provide an annual assessment of how wealth policy responses to tackle inequality pouring into property. While private orders were up by 6% in 2021 led by
OF CHOICE
creation is shaping investment markets, and to highlight opportunities and risks. are on the rise. Expect more wealth investors increased their exposure to buyers from the Gulf (which alongside
This year’s report paints a dramatic picture. Economic, wealth and property taxation, focused on assets rather than real estate investments by 52% in The average value of luxury residential the Red Sea is set to be the next
market trends are accelerating in the wake of the global pandemic, presenting income, and a narrowing in the number 2021, institutional investment volumes property increased by 8.4% in 2021, the superyacht hub). Andrew Shirley links
an ever-wider range of options for investors – but there are growing systemic risks on the horizon. of low-tax jurisdictions. rose just 29%. Private capital now highest annual increase since our Prime clownfish and Jurassic Park to an
accounts for 35% of all investment International Residential Index (PIRI 100) innovative 75,000-hectare nature
LOCKDOWNS BE DAMNED – transactions. With 23% of UHNWIs was launched in 2008. Of the markets reserve with sustainable tourism and
p2 3 GLOBALISATION IS ON planning to invest in property this year, tracked, only seven saw prices decline underwater data centres (page 90).
THE RISE
we tip offices to be the biggest target, in 2021. We dive into the numbers Our assessment of new urban forms
While international airport arrivals with logistics pipping residential to pointing to the outperformers (44% covers 150 new hubs in 40 countries,
plummeted by 72% compared with second place for the first time. growth in Dubai), the most expensive (you including one at the foot of a volcano
pre-pandemic levels, as travellers need US$34 million to access the top of in El Salvador funded by Bitcoin (page
navigated last-minute border closures, p40 PROPERTY INNOVATION the Monaco market) and the most in- 80), and we revisit the final frontier
our report points to a demand for more, The pandemic is driving business demand (53 nationalities own property in – property in space (page 30). Read
not less, internationalism. Around disruption, and property is at the Provence, Europe’s most diverse market). about all this and more, inside…
15% of UHNWIs plan to apply for a epicentre. Priorities identified by our
second passport or new citizenship global team include: green hydrogen p5 8 PRIME FORECAST
and 36% of those are planning to do production (Australia has enough land Far from running out of steam, the luxury
so for a better quality of life. With global to more than meet predicted global housing boom looks set to endure.
exports hitting record levels and cross- demand); renewable energy in Africa Dubai, Miami and Zurich lead our 2022
border real estate investment on the (data centres are being sited close to forecast, with prime prices expected
rise, globalisation is in the ascendancy. the Great Rift Valley’s geothermal to end the year between 10% and 12%
springs); agritech and aquaculture in higher. Asian cities are expected to trail
TECHNOLOGY, the Middle East; plus opportunities in slightly in 2022, but even here prices
p34
ACCELERATOR OF CHANGE the childcare and education sectors, will grow. Key themes to watch: agents
Digital pioneer Dame Stephanie Shirley forestry and vineyards. We also dive into will complain about stock shortages, FOR MORE
confirms the speed of change; when the latest trends in hybrid working. buyers will complain about rising taxes ARTICLES HEAD
ONLINE TO
she started out, computers were still The takeaway? If you’re only working and cooling measures, and city markets
OUR DIGITAL
programmed using punched cards from home or the office, you aren’t will be back in demand – but look for the PLATFORM
(page 6). Her reflections put in context a thinking hard enough about your options. fallout from China’s property slowdown.
TH E WEA LTH REPORT 2 0 2 2 6 T H E W EALT H REPORT 2 022 7
Tech I’m very proud of the up by our bootstraps, each year making a little talking about the double bottom line, finance
bit of a profit and reinvesting it back.” and social impact, and the triple bottom line of
Oxford Internet Institute It’s in sharp contrast to many of today’s finance, social impact and the environment.”
because it really has an extravagantly funded start-ups, but Dame But having fought for gender equality
understanding of life
titans
Stephanie doesn’t begrudge their rapid rise. so fiercely – she originally started using the
“These companies may become a unicorn before pseudonym Steve when it quickly became
online. We struggled they’ve ever turned a profit, but they’re valued so apparent that potential clients weren’t taking
very hard to get the highly because they have control of something her letters seriously – I ask if is she happy with
the way things have turned out some six
human at the centre of that’s innovative and potentially very lucrative.
It’s all about information technology.” decades later. The verdict is mixed.
artificial intelligence More important to her was beating the sexist “When I was disrupting things, women were
attitudes of post-war Britain that dogged her disallowed, legally, from doing certain things.
early career, and creating a workplace where We couldn’t work on the Stock Exchange. We
women, often discarded by employers after couldn’t sign a hire purchase agreement.
having the temerity to start a family, could work We couldn’t take up a mortgage without male
Technology is constantly changing how we play, work and
flexibly in a welcoming environment. authorisation. That seems very alien and
invest. The Wealth Report discusses the metaverse, equality She’s delighted that many corporations at out-of-date now, and what we’ve got left with
and philanthropy with two pioneering entrepreneurs long last no longer consider shareholder returns is a cultural thing where women are legally
as their sole raison d’être. “Companies are absolutely one-to-one.
from different epochs of the digital age “But if you look at corporate boards, they’re
still predominantly male. Some FTSE 100
companies haven’t even got one female on the
Call me Steve “They have got a new writer, which is very exciting,
so we are still living in hope.”
profoundly from the condition and much of the
£68 million she has given away so far has been
main board. I was horrified that the legislation
to monitor the gender pay gap should be waived
Dame Stephanie Shirley, software As background research for this interview to autism charities like Autistica, which she during the pandemic as people think, ‘well,
pioneer and philanthropist, I devoured Let it Go in just a few sittings over founded. However, she felt compelled to add her that’s not really very important. We don’t need
the Christmas holiday. It is inspiring, thought- signature to a recent open letter (co-ordinated to do that.’ I thought that was highly indicative of
talks to The Wealth Report’s provoking and heart-wrenching. “Required by the Oxford Internet Institute, another of her how society still looks at women.”
Editor Andrew Shirley reading for any would-be entrepreneurs or philanthropic endeavours) to Mark Zuckerberg. Since she retired, giving away the fortune
philanthropists” would be my back cover quote. It called on the Facebook founder to do more to that eventually arrived when FI, the successor
D
Her story, which, in a nutshell, involves study the effects of social media on young people. to Freelance Programmers, was floated on
ame Stephanie Shirley left overcoming chauvinism and personal tragedy Does she worry that things have gone too far? the Stock Exchange and she became Britain’s
Vienna in 1939 in something to create a pioneering, boundary-breaking “I may have said it can be used for good, and eleventh richest woman, has been Dame
of a rush. Clutching just a few software company, Freelance Programmers, that of course it can, and it has made an enormous Stephanie’s main focus.
belongings, she was one of went from a £6 dining-table start-up to a difference to the wealth and health of the whole I put it to her that other wealthy individuals
10,000 or so Jewish children whisked away from £3 billion valuation – and her becoming, in the world, but technology of itself is neutral. We have should be following her example and doing
Adolf Hitler’s impending Holocaust aboard the process, one of the UK’s richest women and to remember that it’s the users who decide what more with their fortunes. She insists it’s not up
Kindertransport trains to a new life in Britain. most generous philanthropists – is laid bare to work on, what to develop, what to deploy,” to her to tell other people how to spend their
More than 80 years later we are talking so compellingly and with such brutal honesty it responds Dame Stephanie. money, although she concedes that it wouldn’t
over the phone about what happened next – seems superfluous to try to dig any deeper. “I’m very proud of the Oxford Internet Institute be a bad thing.
we were due to meet in person at her home in I’m keen to discover, though, what Dame because it really has an understanding of life “I mean I have to say yes, but it is a personal
Henley-on-Thames, but Omicron put paid to that. Stephanie, whose early career involved working online. We struggled very hard to get the human decision of the individual, whether they want to
A fortuitous decision as it turns out. I test positive with some of the computer experts who enabled at the centre of artificial intelligence,” she adds. take pleasure from giving or whether they want
a few days later and catching Covid-19 from me the cracking of the Enigma code in the second It’s striking, although perhaps not that to take pleasure from retaining the money and
would not have been much of a footnote to such world war and whose company’s first computer surprising given that she has pledged to give the security that it implies.”
an extraordinary life. programs – Freelance Programmers helped all her money away, that Dame Stephanie is Although she is keen to stress that
It’s a life so extraordinary that her autobiography develop the black box flight recorders for adamant that making lots of it was not a big philanthropy doesn’t need to just be about
Let it Go was due to be made into a Hollywood film Concorde – were just holes punched into cards, driver when she first went into business. altruism – it can also be highly pleasurable for
directed by Haifaa Al-Mansour. The pandemic thinks about the role of technology today. “The idea of raising money never really the donor – she emphasises that it’s most
got in the way, but a Netflix mini-series is still on She lauds the AI-driven robots that help treat crossed my mind. I didn’t think it would be effective when it goes beyond just giving to
the cards, Dame Stephanie, or Steve as she prefers autistic children at the centres she has helped to worth even trying, because we’re talking about charitable causes. Using her business skills
to be called – but more on that later – tells me: fund. Dame Stephanie’s late son Giles suffered 1962 when I started. We really pulled ourselves and leveraging her contacts and relationships
TH E WEA LTH REPORT 2 0 2 2 8 T H E W EALT H REPORT 2 022 9
Photograph courtesy of Kevin Abosch
has, she says, multiplied the value of her
The largest gift I’ve ever given was a quarter of my
donations many times.
Along with Scottish entrepreneur Sir Tom company, but I have my biggest gift still to give and
Hunter, whose approach she says she greatly that is my body for medical research
admires, Dame Stephanie was one of the
pioneers of what has come to be known as
venture or impact philanthropy.
Her advice to would-be philanthropists:
“Aim for some sort of professionalism, start Dame Stephanie with an early version of ERNIE, the computer that picks the UK’s Premium Bond winners.
Checking its randomness was part of her postgraduate work at the Post Office Research Station
local, start small relative to your wealth, choose
causes you know and care about, and start
anonymously because you do make mistakes.”
Returning to that train journey that was so
instrumental in shaping the direction of her life,
I want to finish our interview by asking Dame
Stephanie if she feels the world has learned
anything over the subsequent decades, given
the scale of the current global refugee crisis.
Tactfully, she says she doesn’t feel “up to
speed” on the rest of the world, but believes
“Britain’s hostile environment is absolutely
abhorrent. I think the decision to cut off
undocumented migrants from access to any
public services or access to healthcare is
wrong and it’s inhumane. As a patriot who loves
King of the
this country passionately, I am appalled that
we should set such an example.”
playground
She implies such policies could be short- Metaverse maestro and champion
sighted. “In the short term, when you take an of digital property rights Yat Siu and trade digital cats in the form of non-fungible was still just 13 and had, almost by accident,
unaccompanied child refugee, you’ve got years
of education and support, but when you look at
talks tech with The Wealth Report’s tokens (NFTs) using the cryptocurrency ether. stumbled on to his future career path. It’s a trend
One, we breathlessly reported, had been sold that keeps recurring, he says: “I tend to end up in
entrepreneurs, a high proportion are migrants and Deputy Editor Flora Harley
for the ether equivalent of US$170,000. places because I’m doing stuff, not because of
their drive and energy seems to be based on a
What the article didn’t mention was that the any pre-ordained strategy.”
shitty childhood.”
Y
at Siu may not be a household publishing rights for CryptoKitties, which at one When he was 18 he moved to the US to work
The UK would certainly be a poorer place
name, but like our other tech point was so popular it threatened to collapse for Atari, but when the business stopped making
without the contribution made by Dame Stephanie
titan Dame Stephanie Shirley the Ethereum blockchain, had in 2018 been computers in the early 1990s he helped set up
who, even as her nineties approach, is planning
he will go down as one of the snapped up behind the scenes by an outfit a company focused on Virtual Reality Markup
new ways to help others. “The largest gift I’ve
most innovative and influential called Animoca Brands. The co-founder of that Language. That led to an acquisition by SGI, which
ever given was a quarter of my company [she
tech entrepreneurs of his generation. Similar company? Yat Siu. The net worth of that company in turn brought him to Asia. Looking to test the
believes passionately in employee co-ownership],
to Dame Stephanie’s, his fortune didn’t appear now? More than US$5 billion. waters of the Far East, Siu – at the time, “the only
but I have my biggest gift still to give – and that
overnight, nor did he ever set out to create one. But back to Vienna. Siu was the only son of Asian in the firm” – ended up in Japan, Taiwan
is my body for medical research.”
And his journey, just like hers, also started as a classical musicians who’d escaped China’s and eventually in Hong Kong where he was able
You really couldn’t ask for any more.
child in Vienna. Cultural Revolution in the 1960s. He was also to claim residency because of his father.
I never realised it, but Siu, who now lives in being groomed for a musical career – “think
Hong Kong, was on my radar long before our of tiger parents and that was my mum and
conversation for this interview. As a bit of a crypto dad” – but, struggling with his compositions, he
fan myself, I remember being struck by something resorted to creating open-source programs on
Virtual real estate
READ MORE mentioned in an article in the 2019 edition of his Atari computer to help him. functions in very
much the same way as
ABOUT DAME The Wealth Report exploring the synergies Other Compuserve users started paying for
STEPHANIE
between art and newly emerging blockchains. his software: “people were sending me cheques,
SHIRLEY’S
AMAZING LIFE Almost jokingly, the article mentioned a game but I didn’t even have a bank account,” he says.
physical real estate –
called CryptoKitties where contestants breed When eventually Atari itself came knocking he location is key
TH E WEA LTH REPORT 2 0 2 2 10 T H E W EALT H REPORT 2 022 11
one of our ‘games’ will become decentralised that this data or knowledge dissemination is capacity as both an operator of and investor in are you buying? 99% of the value is the idea and
autonomous organisations (DAOs) meaning limited by the number of connections we can blockchain products allows us to glimpse an the power and the network effect of owning that
that ultimately, despite being major holders physically and mentally interact with. In the opportunity that goes far beyond just another designer and perhaps the rarity. It’s the same: why
of the asset, we will be participants and have metaverse this can be done at infinite scale. capitalist endeavour principally concerned with you buy it isn’t real, it’s the idea and the influence.”
no control.” This is why digital property rights matter; if you maximising profits. We believe that we have a Influence is something that Yat Siu is rapidly
I ask why that matters to users. “For a start, own your data, then you’re in a position to benefit.” chance to develop the framework for a more accruing. The monthly value of the virtual assets
you cannot be deplatformed,” Siu responds. To me Some consider the whole concept of a sustainable, ethical and equitable capitalism.” being traded puts the blockchain gaming
that initially just sounds like Donald Trump being metaverse as dystopian. But Siu, using the ecosystem of Animoca Brands ahead of the
kicked off Twitter, but it’s much more serious, popular gaming platform Roblox as an example, GDP of Djibouti and Bhutan, among others. And
insists Siu. “When you lose access to the digital argues that it is others taking advantage of our
VIRTUAL VALUE many more businesses are likely to be added
world you may lose your social connections or efforts and personal information, in effect making The idea of virtual assets even having a serious to the fold. A capital raising round for Animoca
your ability to do business; you frankly become a us “digital slaves”, that is the real dystopia. “So if value (for more on this see page 46) can be hard Brands in January attracted almost US$360
lesser human because you have lost access to kids make virtual assets and sell them in Roblox, to get your head around, but Siu, whose play-to- million from the likes of Soros Fund Management
online services. But who controls those online which Roblox allows, they get 25 cents on the earn three-dimensional gaming metaverse and Winklevoss Capital.
services? The platforms do.” dollar. That’s almost slave labour, I would say. The Sandbox – in 2018 one of his first major NFT Suddenly, my hour spent chatting to the
It makes sense when Sui talks about apps You would never live in a place where they charge gaming acquisitions – sees plots of virtual real softly spoken entrepreneur seems like a very
being arbitrarily delisted or businesses being 75% tax on anything you do, right? estate sell for hundreds of thousands of dollars, valuable commodity. If you haven’t heard of
pushed off social media sites. “In the physical “We now get to own our digital identities. If says it does make sense. Yat Siu, or wrapped your head around virtual
world, we have governments and judiciaries to you create a digital property, using your talent and “Virtual real estate functions in very much the assets, DAOs, metaverses, Web3, decentralised
protect us from that. You cannot be evicted from creativity, instead of selling it through a platform, same way as physical real estate – location is key. finance and NFTs, now is the time to start
your property because someone feels like it. or not receiving value, it’s direct. You know the For example, in The Sandbox property around getting up to speed.
Yat Siu puts his musical training to good use at Dalton Learning Labs, an educational project to foster future The digital world does not have that governance purchaser and can receive a fee every time it Atari or Snoop Dogg is much more valuable.
entrepreneurs that he helped to set up
but blockchains basically solve that. NFTs transacts on the blockchain. We think this is the Places that have more influence have higher value.
become that model for digital property rights.” true evolution.” It’s community and an embedded network effect.”
A number of trailblazing business ventures Companies like I ask if he sees himself as a moral campaigner The same applies to crypto art – Animoca
followed including Hong Kong Cybercity, the as well as a digital entrepreneur. “Well, it’s a Brands is an enthusiastic buyer of the likes of CONFUSED? HEAD
first free email provider in Asia, and then
Facebook are building BIG DATA mission,” he replies. “With your capital being Bored Ape Yacht Club NFT editions – fashion,
ONLINE FOR A
QUICK GUIDE TO
Outblaze, which developed web-based a closed metaverse. The most valuable corporations in the world are created by you and your data, you actually start and other digital assets, he insists. “In the real THE ABC OF NFTS
communication and collaboration services. In
We intend to construct all technology companies – at the time of writing, creating a form of universal basic equity. Our world when you’re buying a designer bag, what
2002 he was named a World Economic Forum Apple had just crossed the US$3 trillion valuation
Global Leader of Tomorrow and in 2006 a an entirely open mark – and that value has largely been driven by The Sandbox, one of Animoca Brands’ gaming metaverses
Young Global Leader. But it was in 2009 that ecosystem data: your data. Siu argues that we should be
Siu’s first big taste of commercial success getting paid for it.
came with the sale of the messaging division “In the physical world we often get paid, as a
of Outblaze, which by then had 75 million users, derivative of our knowledge, our time, our data,
SPENDING SPREE
to IBM for an undisclosed sum. in the form of a salary or employment. The
Animoca, a mobile games developer, Inspired by the potential of NFTs and blockchains problem we have today, and the opportunity, is
emerged in 2011, and from that Animoca Brands that Siu saw in CryptoKitties, Animoca Brands
was spun out in 2014. Fast forward to 2017 and went on a spending spree that, to date, has seen
Siu is in the Vancouver office of Fuel Powered, it make “more than 150 investments in NFT-related
a firm he’s looking to buy. Sharing the office is companies and decentralised projects that are
developer Axiom Zen, which is working on a new contributing to building the open metaverse”. Animoca empire
game called, yes, you guessed it, CryptoKitties. The crucial word is “open”. Mark Zuckerberg
Selected subsidiaries, investments
It’s here that his quest to reinvent sparked metaverse mayhem in 2021 when he
and cryptocurrencies
cyberspace and empower the people who use announced that Facebook was rebranding as
it through a new version of the internet referred Meta and creating its own digital universe where OpenSea
to as Web3 really began. “Animoca Brands has users will hang out, date, exchange news and Decentraland
a mission to deliver digital property rights to the views, shop, game and invest, all virtually. But it Dapper Labs
world,” Siu says. “Some people look at us as a will be closed. The platform will still have control. Sky Mavis
gaming company because we’re starting with Siu doesn’t think that’s right; and it’s now that our The Sandbox
gamers. But we’re doing this because we feel conversation starts to get really interesting. Sand
gamers have the most obvious understanding “Companies like Facebook are building a Revv Racing
and relationship with their assets in the context closed metaverse,” he explains. “We intend Formula E: High Voltage
of ownership being virtual.” to construct an entirely open ecosystem. Each
WEA LTH 12 T H E W EALT H REPORT 2 022 13
A C C U M U L AT I O N , A S S E T S
A N D A C C E L E R AT I O N
14
The latest UHNWI numbers
from our Wealth Sizing Model
I N S I D E W E A LT H
18
Global wealth industry experts
on what to look out for in 2022
CHAPTER ONE
Wealth
TA X I N G T I M E S
24
Meet the woman on a mission
to persuade the wealthy
to pay more tax
U N S U S TA I N A B L E L U X U R Y
26
Can luxury lifestyles be both
aspirational and sustainable?
THE FINAL
Discover why wealth populations grew PROPERTY FRONTIER
30
in almost all corners of the globe and what Head out of this world
for a new view
UHNWIs should be considering for the future
WEA LTH 14 T H E W EALT H REPORT 2 022 15
Global wealth distribution
he world is still enduring a Asset price rises, from property markets to we forecast that the global UHNWI population
T
Number of UHNWIs per region and annual change 2020–2021
period of significant disruption. stock markets to luxury collectibles, have all will grow by a further 28%. Over the ten years
While the Covid-19 pandemic helped to boost the fortunes of those wealthy to 2026 that represents a more than doubling
North America Europe
+12.2% +7.4% has primarily been a health enough to hold investment portfolios. in the number of global UHNWIs – from 348,355
Risers and fallers crisis, the knock-on effects The top five gainers for UHNWIs, in absolute to 783,671.
World The five countries and territories to see their
on economies, markets and terms, were the US, the UK, France, Japan and By 2026, Asia will surpass Europe as the
+9.3%
Russia & CIS assets have been astounding in many ways. the Chinese mainland. Equity markets played a second largest regional wealth hub. During that
+11.2% UHNWI populations grow by the most and the five
to see the largest declines (in absolute terms) Globally, pandemic-related restrictions and big role with the French CAC 40 up around 30% time we predict, for example, that Singapore will
lifestyle shifts have led to amassed savings during 2021, the US S&P 500 rising over 25% have witnessed a 268% growth in its UHNWI
and an increase in levels of wealth that has not and the UK FTSE 250 around 15% higher. population to around 6,000. However, ten-
been seen for years. year growth is led by Australasia. The region’s
233,590
154,008 Our number crunching reveals that the UHNWI population, led by New Zealand
6,542
world’s population of UHNWIs (those with net Over the ten years to (from 1,249 to 4,618), is expected to more than
assets of US$30 million or more, including treble by 2026.
2026 the global UHNWI
10%
their primary residence) rose by 9.3% in 2021, As mentioned before, the ease with which
13%
10%
11%
8%
13%
6%
11%
8%
6%
2,240 9,717 following on from growth of 2.4% in 2020. population will have investments can now be made and the speed
169,889 This is reflected in the results of our Attitudes more than doubled of innovation will help to create new fortunes
US
UK
France
Japan
Chinese mainland
Survey: 82% of respondents (wealth advisors globally. As the Hong Kong-based digital
and private bankers) said their clients’ entrepreneur Yat Siu points out in our interview
10,337
wealth had increased last year, with more on page 9, the metaverse offers the opportunity
Africa 24,245
than half describing the rise as “significant” Our Attitudes Survey reveals that, on average, for anybody connected to the internet to
-0.8%
Middle East (defined as more than 10%). just shy of two-thirds of UHNWI wealth is create wealth in ways that would have been
+8.8% Asia
+7.2% Over the past five years, the previous allocated to property. Just under a third of total unimaginable just a few years ago.
Latin America optimism peak was in 2017 when 72% of wealth is held in principal and second homes, Further opportunities are discussed by our
+7.6% Australasia respondents to our Attitudes Survey said their while the remainder is invested directly or “Inside wealth” panellists over the following pages,
South Africa
+9.8% clients’ wealth had increased and we saw indirectly (through real estate investment trusts but we should perhaps temper our exuberance.
Tanzania
Malaysia
Vietnam
the world’s ultra-wealthy population grow by (REITs), for example) into investment property. As the aforementioned African wealth growth
Kenya
Source: Knight Frank Wealth Sizing Model
10%, incubated by what were described as Our analysis of prime residential market numbers show, wealth creation among UHNWIs
“Goldilocks” economic conditions. The backdrop performance on page 50 highlights the has not been equal. But away from the ranks of
0%
-1%
-2%
-2%
-7%
is vastly different today, but the story for contribution of rising house prices around the asset-rich, the disparity is even starker with
wealth and asset performance is not dissimilar. the globe, while for investment property global inequality levels, exacerbated by rising
The only world region to see a decline (-0.8%) the most recent data from the MSCI Global energy and food costs, increasing – even in the
in its UHNWI population was Africa. According Property Fund Index shows a total return of developed world.
to our Attitudes Survey, the continent’s wealth 10% for 2021. The Macrobond FTSE EPRA/ Some mutter ominously about revolution,
Accumulation, assets
advisors were also the most pessimistic about NAREIT World Equity REITs Index saw a and a group of US millionaires is even calling
their clients’ wealth prospects. Indeed, three 33% return for the year. to be taxed more (see page 24) to help correct
out of the five nations to see their UHNWI the imbalance. Against this backdrop, it would
populations fall the most were in Africa. ACCELERATION be cognisant to recognise that wealth creation
and acceleration
cannot continue in a vacuum.
Few imagined at the start of the Covid-19
ACCUMULATION AND ASSETS crisis that we would experience the V- or “Nike
The savings amassed during 2020 have Swoosh”-shaped recovery that saw many
enabled significant investment upside over the economies back to pre-pandemic levels by the
past 12 months. Access to technology and end of 2021. This may explain why our Attitudes
If 2020 saw the fortunes of the wealthy remain resilient,
the digital democratisation of investments, Survey respondents are so bullish – 83% expect
then 2021 saw them accumulate. Flora Harley unpicks the including private equity, have led to greater their clients’ wealth to increase in 2022. HEAD ONLINE
TO EXPLORE THE
latest numbers from the Knight Frank Wealth Sizing Model, levels of wealth creation and growth. This is The five-year forecasts generated by our
FULL RESULTS
something that will gain momentum over the Wealth Sizing Model have duly increased given
compiled by our data science lead James Culley, to assess coming years and that we discuss in more the prospects for wealth growth and creation
BREAKDOWN BY
COUNTRY/TERRITORY
the extent of those gains detail on page 18. in the coming years. Between 2021 and 2026,
WEA LTH 16 T H E W EALT H REPORT 2 022 17
The five-year view
Predictions for % growth in UHNWIs by region 2021–2026
+28 +26 +11 +24 +33 +33
+25 +5 +28 Attitudes
Survey
North Latin Europe Africa Middle East Asia Australasia Russia & CIS Global
Next generation wealth
America America UHNWIs who are self-made and
under the age of 40
The ten-year view Attitudes
Survey
Region Number of next gens
Projected increase in UHNWIs by region 2016–2026 (% total UHNWIs)
Global The individual view
North America Europe +125% Survey respondents’ expectations for their
+116% +106% clients’ wealth direction in… North America 44,751 (19%)
Asia 44,565 (26%)
Russia & CIS 783,671 2022 Europe 30,291 (20%)
What’s
+77% (projected UHNWIs 2026)
83 3 Australasia 3,367 (14%)
299,220
93,502
348,355 2021 Latin America 1,229 (12%)
next?
(actual UHNWIs
Middle East 1,879 (19%)
2016) 71 8
Russia & CIS 2,923 (45%)
2020
3,878
192,426
138,739 6,843 Africa 552 (25%)
55 12
2,146 12,028
2019
Source: Knight Wealth Sizing Model
2,489 225,391
4,452
64 12
13,004
9,769
85,172
32,271 2018 Using the results from our Wealth Sizing Model and Attitudes Survey,
Africa
+16% 67 7
10,696
Flora Harley looks at the size of the “next generation” of the world’s
Middle East
+170% Asia
% predicting an increase
UHNWI populations – and at what that could mean for property markets
% predicting a decrease
Latin America +165%
+33% Australasia
+202% Note: Based on five years’ Attitudes Survey data
G
lobally, we estimate that 129,557 This generation is more global, more tech Younger UHNWIs are global buyers who
Wealth hubs 2016–2026 UHNWIs are self-made and savvy and places greater emphasis on wellbeing want to hold assets across geographies, adds
The countries and territories forecast to see the largest proportional increase in their UHNWI populations under the age of 40; almost a – their own, that of their families and that of the Rory Penn, Head of Knight Frank’s Private Office.
fifth of the total population. environment. Our Attitudes Survey respondents “They put emphasis on service provision, open
North America, with 44,751, also told us that the next gen view real estate, space, amenities and room for entertaining, and
270% 268% has the largest cohort, but Asia’s marginally lower be it for a home or investment, as more akin to are willing to refurbish and reimagine space.” They
256% total of 44,565 accounts for a higher proportion an investment portfolio – the economic case are also getting wealthier, he points out. “In
228%
209% – 26% – of the region’s super-wealthy. Russia, has to stack up. London’s super-prime (£10 m+) market, there has
194% 190% 189% 184% 183% however, boasts the highest relative number of In Singapore, tech-savvy young UHNWIs been a fundamental shift towards younger buyers.”
next-gen wealth creators, with 45% (2,923) of its are looking beyond the traditionally sought-after As this cohort of wealth continues to grow,
UHNWIs falling into the category. Good Class Bungalows (the pinnacle of the property markets will adjust. For some insights into
Top 10 risers
So, what does this mean? Well, for starters, in city’s property ladder), often seen as exclusive the future of the home, see page 66. In addition,
the 2021 edition of The Wealth Report Attitudes and a long-term store of wealth, notes Nicholas we will likely see more tokenisation and digital
Survey we uncovered that 70% of UHNWIs Keong of Knight Frank’s Singapore Private Office. ownership of property emerging due to greater
under the age of 40 had different views to their “They want flexibility to build their own home adoption and understanding by this younger
New
Zealand
Singapore
Chinese
mainland
Czech
Republic
Ireland
Australia
Poland
Israel
Sweden
Malaysia
parents when it came to property investing – one to suit their lifestyle. They often include smart generation – mortgages based on non-fungible
of the reasons that we decided to calculate their technology, a focus on energy efficiency and tokens are already being issued. See our “Inside
numbers this year. connectivity, both digital and physical.” wealth” article on the next page for more on this.
Source: Knight Frank Wealth Sizing Model14%
WEA LTH 18 T H E W EALT H REPORT 2 022
18%
Americas
20%
22%
EMEA
24%
Asia-Pacific Meet our panel
29%
31%
Alexander Chartes
AC
Investment Director at Ruffer LLP
37%
Alexandre Tavazzi
40%
AT
41%
41%
Global Strategist & Head of the CIO
Resp
Office, Pictet Wealth Management onde
citing nts
ty
issue
equali
Caspar Rock high im as
CR porta
nce
53%
Chief Investment Officer,
55%
Attitudes
h in
56%
Cazenove Capital Survey
57%
Wealt
60%
Sunshine and rain
nge
David Bailin
ins
DB
ic
te cha
tc.)
Chief Investment Officer,
em
65%
ly cha
66%
ism, e
s
Citi Global Wealth Management Investments Top ten opportunities and threats for
pand
st rate
Inside
Clima
70%
70%
Supp
James Wey creating and preserving wealth
olicy
r
iants
vid-19
/terro
JW
Intere
Head of Singapore and Southeast Asia,
ent p
n
n
r
Wealth Management,
Inflatio
ulatio
-19 va
il wars
he Co
JPMorgan Chase & Co
m
overn
d re g
Covid
ts of t
iv
Julie Gauthier
ings/c
wealth
JG
n
stic g
Investment Director,
Tax a
impac
New
(upris
Stonehage Fleming
Dome
term
Kunal Lakhani
flicts
KL
Director, Family Office &
nger-
d con
Major Family Groups, NAB
The lo
Pierre-Yves Lombard
Arme
PY L
Deputy Head Private Clients,
Asia Ex-Japan, Lombard Odier
Flora Harley reveals the threats and opportunities to Piers Master
PM
UHNWI wealth creation and accumulation identified Partner and Head of Private Wealth,
Charles Russell Speechlys
by our Attitudes Survey, and quizzes a panel of ten
Sheldon Halcrow
leading wealth advisors from around the world for SH
Executive Partner, Caleo Capital
their thoughts on the big issues facing their clients
ts
84%
Threa
79%
WHAT ARE THE BIGGEST 72%
AREAS OF OPPORTUNITY 70%
The densification of digital infrastructure We continue to like equities, particularly
JG JW
FOR PRIVATE WEALTH? needed to support 5/6G combined with those that follow broad ESG themes Respondents
61%
61%
our reliance on technology will require and selective plays in healthcare and citing issue as
high importance 52%
PYL
O ngoing tension around regulatory heavy investment for years to come. We pharmaceutical. Pandemic-induced 49%
changes on the Chinese mainland are also looking at DeFi (decentralised technical plays that are time sensitive 43%
doesn’t change the attractiveness of finance) strategies within cryptocurrency are another important area. 36% 36% 35%
technology and innovation in Asia – markets. The adoption rate of crypto 33%
28%
especially for hardware, software, is like the internet in the early 1990s.
23%
robotics and electric vehicles. 22% 21%
Opportunities
A key investment thematic is targeted
KL
People don’t realise how distorted the responsible investing, and not just the E 11%
DB 8% 6%
world still is by the pandemic. We are in environmental, social and governance
in a transition point from early recovery (ESG). There is strong evidence that
Technological/
digital adoption
Private equity/
venture capital
Real estate
Equity markets
Blockchain
technology
ESG
Wealth transfer to
the next generation
Global financial
transparency
Deglobalisation
Interest rates
to the middle and need to assess which leadership in ESG, which is calculated People don’t realise
companies will do well in that cycle. and properly calibrated, enhances
Opportunistically, we look towards overall return for investors.
how distorted the
what we call unstoppable trends. world still is by the
Broadly, there are four: climate; cyber-
SH
In the private equity space there is a lot pandemic
security and digitisation; longevity and of interest in cellular and sustainable
healthcare; and the rise of Asia. agriculture as well as green energy. David Bailin Note: % of respondents who rated topic as an increasing threat or increasing opportunity, and % who rated it as of high importanceWEA LTH 20 T H E W EALT H REPORT 2 022 21
Political risk is AC Political risk is going to be much more CR From a tax point of view, levelling up or PM Tax is a traditional worry and we are now JG Digital real estate will become just as
going to be much significant in the years ahead. China common prosperity are not too different seeing the possibility of taxes being important as physical assets over the
more significant in is a particular concern with its attempt as political aspirations, but the delivery extended to jurisdictions which traditionally next decade. We’ve seen a big increase
to shift the growth model away from is different. Both are trying to address haven’t had them. The Middle East, for in real estate developers looking at
the years ahead excessive real estate development inequality, and tax policy is an example, is mulling over direct taxation in tokenising properties and allowing
OUTLOOK FOR RATES
Alexander Chartes towards more consumption and next instrument. Pandemic deficits need to the future. Privacy is another concern. investors to invest in those tokens.
generation industries. be filled and other holes may emerge. In UHNWIs worry that there is too much
The potential velocity of interest rises
the UK, the phasing out of petrol and information about them and their families. SH We always have a healthy allocation
poses one of the most perplexing
DB The slowdown in China’s economy; diesel will cost the Exchequer £30 billion to property. Our clients are starting
questions for investors. Of our
WHAT RISKS ARE YOU the Federal Reserve tightening too in fuel duty revenue so that gap will need Attitudes Survey respondents, 60% to embrace a broader variety of
WATCHING OUT FOR? quickly (which would be a mistake); to be filled, too. see rate rises as an increasing threat, HOW DO YOU VIEW REAL alternative ways of accessing property,
a misjudgment of inflation (we think it is yet 21% view them as an opportunity. ESTATE WITHIN YOUR CLIENTS’ such as listed property. They are also
PYL If rates are raised aggressively then transitory); and a potentially destabilising increasingly looking at homes overseas,
Linking to the inflation debate, we PORTFOLIOS?
this could be a drag for long duration Russian invasion of Ukraine. a plan B and/or a second passport.
Digital real estate will asked our panellists for their views
PY L
assets. China’s macro policy reforms – on how much higher the Federal We are seeing increasing interest in (31% of South African UHNWIs plan
in technology, finance, education and SH Ongoing Covid disruption and lockdowns become just as important Reserve’s interest rate will be by the both indirect exposures, by way of real to apply for a second passport/
real estate – are part of a broader trend are particularly worrisome for the African as physical assets over end of 2022. The average view was 75 estate investment trusts for example, citizenship, according to our Attitudes
to watch and we expect more in the run continent. In South Africa the economy basis points (bps), with a range from and direct investment in physical real Survey.) Traditionally they would look
up to the Party Congress in November. is so fragile it can’t afford or tolerate
the next decade 25bps to a hawkish 225bps higher. estate, especially as a hedge against to the UK or Malta, but are increasingly
another full lockdown. Julie Gauthier potential inflation. turning to the US and Portugal.
KL Because of the increase in inequality,
there will be greater pressure on higher JW With inflation, traditionally, there are
taxation for those with higher assets. two assets that benefit most – equities
We may see a shift to asset rather than and real estate. So pay attention to
income taxing in more OECD countries. these. For Asian UHNWIs real estate
is an important source and store of
AT
Blockchain,
Can Asian nations continue to have a wealth and is always an integral part
zero Covid policy? The initial part of the of the portfolio mix.
recovery was based on manufacturing.
Bitcoin and
The second leg is services as economies CR In the UK we have good exposure to
Increasingly, clients are asking for 1%–5% of their portfolios to be in
reopen and this is where you have the SH supermarkets, retirement living, doctors’
Betamax
crypto. It reminds me of the battle of VHS and Betamax – eventually VHS
big bulk of 2022 growth. If lockdowns surgeries, warehouses and last-mile
won. Now the question is, is it bitcoin or ether or another? The sooner we
continue, this recovery scenario is at logistics. We also like digital infrastructure
embrace it and authorities understand how to regulate and tax it, the better.
risk with a double whammy of growth assets. More specialist vertices mean
going down and inflation going up. more exposure to the upside.
Over 60% of Attitudes Survey respondents cited blockchain AT
The lack of faith in paper currencies means many are using crypto to protect
wealth. Gold prices have reacted less to the current round of inflation than
technologies as an increasing opportunity. Here is a selection
historically, but we saw big movements in cryptocurrencies. It is not a mature
of thoughts on cryptoassets and blockchains from our panel market and is difficult to recommend, but we are watching the space.
We have a JPMorgan coin. This is being utilised to clear large internal We are seeing a shift within the banking industry to accepting and managing
JW
trades, moving billions around the world safely and securely using
JG
cryptoassets, allowing them to be used as collateral and converting crypto The sooner we
blockchain technology. This could have huge implications in enhancing into fiat. It is not a widely marketed service, but banks recognise that the embrace it [crypto] and
There will be greater payment systems more broadly. younger generation are going to be using crypto as a currency.
authorities understand
pressure on higher
There are some interesting potential applications: for example, blockchains From a legal and tax perspective cryptoassets are tricky as they are difficult how to regulate and tax
taxation for those CR PM
could make real estate markets far more liquid. In the past, you couldn’t do a to define. A lot of people do not have a sufficient understanding of them for
it, the better
with higher assets property tracker fund as you couldn’t buy a thousandth of every property – the comfort levels to be there – they are a risky choice. But I suspect they are
but if they were on a blockchain, you could. here to stay and will be more heavily regulated. Sheldon Halcrow
Kunal LakhaniYou can also read
