THE GLOBAL ULTRA-PRIME MARKET 2019 - Knight Frank
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THE GLOBAL
ULTRA-PRIME
MARKET
2019
Knight Frank The Global Ultra-Prime Market 2019
TOP TIER LOCATIONS
In this report we present the first ever
global assessment of ultra-prime
SKI RESORTS SECOND HOME DESTINATIONS CITIES
residential markets. We have reviewed
market data across the world to confirm
the true extent of the world’s top tier
residential locations.
We conclude that there are 17 markets
which can be described as truly
ultra-prime. Our definition being locations
where there are at least three transactions
over $25 million each year, over the past
three years.
To provide a rounded assessment of
each market we explore what makes
each location so desirable and able to
command ultra-prime pricing. Where
possible we have mapped sales from the
past three years. The locations identified
can be segmented into three market
types: cities; second home destinations; The four ski markets Second home markets City markets occupy
and ski resorts. The data confirms that we have identified represent almost half of the locations
London takes top spot for the number of in the ultra-prime a third of our we recognise as
transactions above $25 million, over the segment are St Moritz, ultra-prime locations: ultra-prime. These
most recent full three year period, with Gstaad, Courchevel with the US cities are: London,
Hong Kong holding top spot for highest and Aspen, Colorado. represented by Malibu New York, Hong Kong,
prices achieved and average price for and Palm Beach; Los Angeles, Sydney,
transactions in this segment of the market. Europe’s ultra-prime Singapore, Miami and
offering is confined Paris.
to the Cote d’Azur
and Monaco; and the
Caribbean as a whole
provides our final
ultra-prime second
home destination
Note: All values are quoted in US$ unless stated
otherwise. All data relates to that which is reported and
may not cover all transactions in the market place
Front cover image: 111 West 57th Street, New York
-2- -3-
Knight Frank The Global Ultra-Prime Market 2019
CITY MARKETS
4
City markets dominate our global
spread of ultra-prime markets with HIGH-END VALUE LONDON
eight making the grade. Here, we set Sales in the ultra-prime ($25 million and above) segment of six global cities
out details on six of these markets London’s reputation as one of the world’s leading ultra-prime
Total value of transactions ($ million) 2015 2016 2017 Year to August 2018 1 W1K 26
– which in 2017, collectively saw 155 markets is supported by its global appeal, the dominance of
2 SW1X 23
transactions above $25 million, with a US$0m $500m $1,000m $1,500m $2,000m $2,500m $3,000m
3 W8 22
its business and financial services cluster and its convenient
combined value equating 4 SW1W 18 10 geographical location. This prominence was reflected in the
Hong Kong
to $6.9 billion. 5 SW3 11 Knight Frank City Wealth Index, as published in The Wealth
6 W11 9 20 Report 2018.
7 NW8 7
Transaction volumes grew by 13% in the New York
8 SW10 7
year to 2017. The growth in activity looks 9 W1J 7 14 In 2015, transaction volumes above $25 million were almost
set to continue. In the first eight months 10 N2 6 double the number seen in any other location. This position
London
of 2018 our group of six 11 SW7 6 has changed in recent years as higher stamp duty charges
12 NW1 4
top-tier city markets saw 116 transactions, 7 12 and concerns over Brexit have reduced the number of sales
13 W14 4
worth a combined $5.1 billion. Singapore in London, while other markets have seen their sales increase.
14 NW3 3 25
15 W1U 3 23 Notwithstanding this relative decline, London’s average annual
3 16
Over the most recent full three year Los Angeles
16 W2 6 transactions over the most recent full three year period, at 48
1 24
17 SW1E 2
period, London and Hong Kong both is higher than that of New York and Hong Kong with 40 and 38
18 SW1H 2 3 15
led with an average annual value of 13 11 19 respectively.
19 SW1Y 2
Sydney 22 2 9 18
transactions in the ultra-prime segment 17
4 21
20 N6 1 5
totaling $2.1 billion, New York follows with 21 SW1P 1 8 The traditional ultra-prime markets in Belgravia, Mayfair and
$1.5 billion. 22 SW5 1 Knightsbridge attract the most activity, with these areas alone
Number of transactions 2015 2016 2017 Year to August 2018 23 W1H 1
accounting for 62% of transactions in 2017. The most common
24 W1S 1
Looking at the most recent 12-months 1
property type being sold are houses, which account for, on
25 W9
period, to the end of August 2018, the average, 54% of transactions. The average price for ultra-prime
47 39 38 12 12 5
results are: Hong Kong on top with 47 sales was $42.5 million over the most recent full three year
Source: Knight Frank Research, LonRes, HM Land Registry
transactions, followed by New York with period, the second most expensive location behind Hong Kong.
39 and London with 38. In terms of total
47 42 37 5 18 6
value, Hong Kong again leads with a
combined $2.5 billion, followed by New NEW YORK
York and London both with $1.5 billion. 36 16
30 50 2 3
With New York topping the Knight Frank City Wealth Index,
When looking at the average value 1 10022 34 its positon as one of the largest markets for $25 million plus
2 10021 19
of transactions in the most recent 37 28 72 4 5 6 sales is not surprising. This index ranks cities based on
3 10023 15
12-months period, to the end of August their population of wealthy individuals, property investment,
4 10019 12 15
2018, Hong Kong again leads this 5 10011 12 lifestyle elements and future potential wealth creation, with
9
measure at $52.8 million, followed by 6 10013 10 WC1X
New York topping all measures.
Hong Kong New York London Singapore Los Angeles Sydney
EC1V
13 WC1H
Singapore at $44.1 million and Sydney 7 10065 9 EC1R
WC1N
8 10014 9 2 EC1Y EC2A
with $43.8 million. WC1E
The high-end
EC1M market here increased by 50% between 2015
9 10028 3 W1W WC1B
6 W1U W1G
7
WC1R EC2Y
WC1V and 2017, EC1A with 42EC2M transactions, and this pace has continued
W1T EC1N
Average transaction value $ 2015 2016 2017 Year to August 2018 WC1A
10 10012 5 W1H
Over the next few pages we pin-point 11 10010 5 1
WC2A
with
EC4A
the 12 months
EC2V
to
EC2N
August 2018 witnessing 39.
4 W1C W1B
W1F
WC2H WC2B EC4M EC2R EC3A
the most sought after areas in each of 66 W1D
EC4Y EC4N
EC3V
EC3M
12 10007 4
W1S WC2E
WC2R
EC4V
55 57 53
EC3N
W1K EC4R
our top city markets, using our unique 50 13 10075 4 WC2N
Over a third of transactions occur in Downtown with a further
EC3R
48 SW1Y
ultra-prime sales data to confirm where 42 44 44 45 44 14 10003 3 16
W1J
33% inLONDON
Midtown. The Upper East Side, which includes 5th
40 39 40 41 4 CENTRAL
37 35 39 38 37 37 37
33 15 10128 1 SW1A
SUB-DISTRICTS
transactions have taken place in the 29 11 Avenue, accounts for 22%. The predominant property type is
16 10001 1 SW1X SW1H
three years to August 2018. SW1E
unsurprisingly apartments, covering 85%
14
SW1P
of transactions.
SW1W
Hong Kong New York London Singapore Los Angeles Sydney 8
10 SW1V
6
Notes: Los Angeles data excludes Malibu. All data relates to that which is reported and
may not cover all transactions in the market place 12
Source: Knight Frank Research, Douglas Elliman
Source: Knight Frank Research, Douglas Elliman, LonRes, HM Land Registry, Memfus Wong Property Information Centre, REALIS
-4- -5-
Knight Frank The Global Ultra-Prime Market 2019
HONG KONG SINGAPORE
1 HP 62
Hong Kong leads as the most expensive global ultra-prime market, with Singapore is undoubtedly an ultra-prime market – although it sees the
1 10 18
2 HMW 23 an average price paid over the past three years equating to $54 million. smallest number of transaction numbers compared to our other city
29 2
3 HRB 13 In the 12 months to August 2018, Hong Kong was home to 47 transactions markets. This is partly due to the raft of cooling measures introduced in the
3 15 1
4 HSL 9 - the highest of any city. wake of the Global Financial Crisis. The number of sales above $25 million
4 21 1
5 HHV 7
cooled to just two in 2016, but has since recovered with five in 2017 and
6 KHMT 5
7 KSWK 4
Hong Kong attracts a large number of expatriates to live and work due 11 in the first eight months of 2018 demonstrating the underlying health of
8 KKL 4 to its status as an international financial centre. With attractive education this market.
4
9 NSK 3 options, low taxation and an established and strong legal system, as well
11 1
10 HSW 2 as a relatively stable political environment – the city offers an attractive 2 3 Transactions at this price level are mainly to be found close to Orchard
11 NPSK 2
9 environment for wealthy individuals. Investment in residential property is Road, with proximity to this being the key defining factor. Properties
12 ISL 2
13 HTT 2
attractive due to relatively low property taxation, no capital gains tax and transacting at the top-end of the market tend to be large houses or
21
14 KCSW 1 no inheritance tax. bungalows with additional amenities such as a swimming pool, large
14 86
15 HSKW 1 15 19 23 gardens. There have been a handful of apartments in this space, but only
16 HWC 1 7 18 Source: Knight Frank Research, REALIS
17 20 16 Most properties that have transacted above $25 million are larger houses large penthouses are likely to achieve this price point.
17 HKT 1 10 1 2
5
13
in luxury areas such as The Peak, most notably Mount Nicholson, or in
18 KTST 1 22
19 KMK 1
3 Island South. Properties here have views of Victoria Harbour as well as
4
20 HA 1 benefiting from garden space, swimming pools, and many with gym and
12
21 KSKM 1 spa facilities. The largest buyers in this segment are local, yet there is a
22 HPFL 1 notable presence of Chinese Mainland buyers. OTHER CITY MARKETS
1
23 KKAI 1 Source: Knight Frank Research, Memfus Wong Property Information Centre
1
1
Miami and Paris also feature in market in Paris is being aided While there have been a very Knight Frank has seen strong
1
our city markets for this market by strong house price growth in limited number of sales above the demand for properties in this
LOS ANGELES segment, yet transaction numbers the past two years totalling 18%. $25 million mark in Dubai, this is segment of the market, with the
recorded here are generally The types of properties covered not an indication of a lack of ultra- benefit that in Dubai, buyers are
Los Angeles has seen significant growth in its ultra-prime market. In 2015 lower than the numbers seen in varies widely, with many in Miami prime schemes. In fact, there are able to acquire these ultra-prime
1 90210 20 there were five transactions recorded above $25 million, growing to 18 in the cities we showcase above. being penthouses in residential a number of schemes where the projects at values that are relatively
2 90077 18
2017. This total excludes transactions in Malibu which we discuss later. These are growing markets and developments whereas in Paris, quality matches, or in some cases, lower, compared to other key
3 90272 3
7 ones in which we expect to see the typical transaction involves surpasses what is found in those global cities, whilst still benefitting
4 90024 2 6 5
3 4 1 2
5 90069 2 Over the three years studied, the top destination within Los Angeles a growth in transaction volumes houses with gardens in the 6th and priced at $25 million and above, in from Dubai’s business and lifestyle
6 90049 1 has switched between the sub-markets of the city of Los Angeles itself over the next few years. The prime 7th Arondissements. other key global cities. offer.
7 90046 1 and Beverly Hills. Los Angeles’ prominence in this market segment is
unsurprising as the city ranked second in the “wealth category” in the
2018 Knight Frank City Wealth Index.
Source: Knight Frank Research, Douglas Elliman
SYDNEY
Almost all of Sydney’s ultra-prime transactions over the past three years
1 2027 8
2 2030 5 occurred in the Eastern Suburbs of Sydney and all were for houses. Whilst
3 2011 2 Sydney is one of the smallest city markets in regard to transaction levels,
2 4 2028 1
it has some of the most spacious properties with the typical transaction
5 2029 1
encompassing plots of land, and an average saleable area of 1,976 sq m.
Not only do the properties cover large areas, but the majority have waterfront
1
5 views and a private swimming pool.
4
3
Source: Knight Frank Research
-6- -7-
Knight Frank The Global Ultra-Prime Market 2019
SECOND HOME MARKETS
Second home markets occupy
five out of the 17 locations MALIBU PALM BEACH
that we recognise as forming
part of the global ultra-prime Palm Beach and Broward County is the only second home market to see
1 PACIFIC COAST HWY 7 3 1 33480 12
market. As with city markets transaction levels close to some city markets, having seen an average
2 SWEETWATER MESA RD 2 1 5 2 2 33462 4
most second home markets 4 of five transactions per year, over $25 million over the past three years.
3 MULHOLLAND HWY 1 3 33483 3
have seen an uptick in sales 4 BIRDVIEW AVE 1 4 33316 1 Much like other waterfront locations, the most common transaction in this
volumes over the past three 5 MALIBU COLONY RD 1 segment comprises properties with land, and in particular beach front,
years. Here, we describe with an average size of over 1,400 sq m.
each market and the types of
1
4
properties as well as key market 2
demographics.
3
Source: Knight Frank Research, Douglas Elliman
Malibu is a market which has seen consistent growth Malibu started as a second home destination for
in the number of sales over $25 million. In 2015, only the entertainment industry, original dubbed ‘Malibu
COTE D’AZUR
two properties transacted in this bracket. This has Movie Colony’. This heritage heightened the iconic
risen to five in the first eight months of 2018 with one status of the area and broadened the appeal for many
of these reaching over $100 million. The average price international buyers. People flock to Malibu to enjoy the 1
1
above $25 million was $59 million in 2017, with the size 23 miles of beachfront, where the most sought after The Cote D’Azur is home to some of the most expensive and sought after
1
of plots averaging over 1,000 sq m. properties are located. property in France. With popular destinations including Saint Jean Cap-
1
Ferrat, Cap d'Antibes, Cannes and St Tropez. The typical home transacting
in this market segment varies by destination. In Cannes, the hills are very
popular, in part due to their panoramic views. In Saint Tropez views again
CARIBBEAN reign supreme and some of the most expensive properties offer privacy
in gated areas. And of course, many of the properties at the top end in the
region sit along the iconic waterfront.
Image: Grevillia
MONACO
As we reported in The Wealth Report 2018, Monaco holds the title for
the world’s most expensive property, with an average across the whole
market of $50,000 per sq m. In the ultra-prime market the average
With a region so synonymous with favourable weather Barbados' appeal is aided by an attractive climate, its is much higher. This level of pricing is unsurprising given that the
and idyllic beaches, it is no wonder the Caribbean location outside of the hurricane belt, a favourable tax principality is the most densely populated country, in terms of its
features on this list. The most prominent destinations regime and strong lifestyle offer. Typical ultra-prime ultra-wealthy population.
are the Bahamas, Barbados and St Barts. Other residences are traditional in style with colonial era
notable islands include Mustique and Tumby Bay. properties in demand. The size of the principality limits supply which is then matched with
strong global demand, stemming from the combination of lifestyle and
The destination seeing most activity in this bracket is St Barts, however, is growing rapidly in demand with an its low tax status.
New Providence in the Bahamas. Ultra-prime sales expanding high-quality restaurant and retail offer. The
usually include beachfront properties, or indeed typical property in St Barts varies from others in the
an entire island. The appeal of the Bahamas is its Caribbean, with contemporary properties dominating.
international connectivity through Nassau, as well as
close proximity to the US; Miami is only an hour’s flight. Image: Little Pipe Cay, The Exumas Bahamas Image: Tour Odean
-8- -9-
Knight Frank The Global Ultra-Prime Market 2019
SKI DESTINATIONS FUTURE LOCATIONS
There are four true ultra-prime Knight Frank’s Wealth Report 2018 Taking some of the key findings
ski destinations – three in the THE ALPS (ST MORITZ, GSTAAD AND COURCHEVEL) highlights that the global ultra- from the Knight Frank City Wealth
Alps and Aspen, Colorado. wealthy population ($50 million in Index 2018 other cities such as San
Located in the Swiss Alps, the resort net assets or more), grew by 18% Francisco, Chicago, Dallas, Beijing
of St Moritz provides the perfect in the five years up to 2017 and and Shanghai may soon rise in
location for those who love snow is forecast to increase a further the rankings. Due to the nature of
sports. The area is popular among 40% between 2017 and 2022. This purchases in second home and ski
those looking for a permanent growth in global wealth is likely destinations the next markets are
destination with a favourable flat to mean that transactions at the more difficult to capture. However,
rate tax regime operating in the very top-end of the market will markets such as Sardinia,
Canton. However, properties at continue to increase and spread Portofino and other resorts in the
the top-end of the market must be to more locations that we haven’t French Alps are also seeing more
purchased as a primary residence highlighted over the previous activity at this level, a trend that we
due to Swiss law. There is also a nine pages. expect to continue.
wealth of activity taking place with properties here often exceed 1,000 offers residents a lot of discretion,
the world famous Cresta Run and sq m, with most offering an indoor particularly the favourable area of
Snow Polo in the winter. swimming pool, spa, underground Oberbort. There are restrictions
garage and staff accommodation. on the type of properties built,
The hillside of Suvretta, or areas which means that many offer the
offering lake views in the main The other prominent destination ‘Swiss chocolate box’ appeal.
resort, are particularly prominent in the Swiss Alps is Gstaad. The Most properties in this price
locations for ultra-prime property. area is regarded as a mountain bracket include a lift, pool, and staff
These locations offer discrete village that offers skiing, but which accommodation.
surroundings and plentiful space, is not solely a ski resort. The village
ASPEN
The properties in Aspen tend to be
on larger sites than those in most
other markets discussed. For the
ultra-prime bracket, out of town
properties often include significant
areas of land - 200 acres or more
and accommodation above 1,400
sq m. For those closer to the
town centre, the sites are typically
smaller with roughly 3-4 acres but
with the added bonus of being
able to walk to the high street.
Willoughby Way, the lowest road on
Red Mountain, offers spectacular
views in close proximity to the town,
making it a favourable destination.
The appeal of Aspen is growing
not only as a winter destination
but also in the summer months.
Aspen is making a name for itself
as a cultural hub, with the Aspen
Institute of Ideas Festival and its
Music and Food & Wine Festival.
- 10 - - 11 -
Contacts Research Liam Bailey Global Head of Research +44 20 7861 5133 liam.bailey@knightfrank.com Flora Harley Senior Research Analyst +44 20 7861 1436 flora.harley@knightfrank.com The Knight Frank Private Office Paddy Dring Global Head of Prime Sales +44 20 7861 1061 paddy.dring@knightfrank.com Rory Penn Head of Private Office +44 20 7861 1150 rory.penn@knightfrank.com Thomas van Straubenzee Head of Private Office +44 20 7861 1174 thomas.vanstraubenzee@knightfrank.com Important Notice © Knight Frank LLP 2018 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
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