- Globally, 21% of UHNWIs plan on purchasing a new home in 2022
- 9% of the Indian UHNWIs are planning to invest in commercial properties indirectly through REITS or debt funding in 2022
- Energy source (solar, fossil fuel, heat source pump) have been the key factor considered while home purchase in India
- Allthe Indian UHNWIs are more interested in ESG- focused property for investments
Mumbai, March 1, 2022: As per Knight Frank’sThe Wealth Report 2022, 10% of India’s ultra-high-net-worth individuals (UHNWIs, with a net worth of US$ 30 mn and above) plan to buy a new home in 2022.Indian UHNWI prefer to invest in properties in the domestic market (home country India), followed by international markets of UK, UAE and US. Globally, 21% of the ultra-wealthyare expected to purchase a home in 2022. The report further highlighted that on an average an Indian UHNWI owns 2.3 homes and 32% of the Indian UHNWIs have rented out their second homes during 2021.
% UHNWIs BUYING HOUSES
| World | Asia | India | |
| 2021 | 19% | 24% | 7% |
| 2022 (E) | 21% | 23% | 10% |
Source: The Wealth Report Attitudes Survey 2022
PROPORTION OF TOTAL WEALTH ALLOCATED TOWARDS REAL ESTATE
According to the Attitude Survey that is part of the Wealth Report 2022, 29% wealth of Indian UHNWIsis allocated towards purchase of principal and second homes.Further, 22% of UHNWIs’ investable wealth was allocated towards direct purchase of commercial property (including rental property, offices etc.) while 8% was allocated towards indirect purchase of commercial property (including REITs, funds, etc.).Additionally, the survey cited that 8% of the property portfolio was held overseas.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “Investment in the real estate sector in India has grown in recent times especially in the wake of the pandemic as real estate was viewed as a safe and tangible investment option amidst the economic volatility. Further, at attractive valuations, real estate continued to drive institutional demand. The governing rules surrounding REITs are regularly updated to augment the scope of these investment instruments in India.Our survey indicates that the investor interest will remain stable in 2022. Interestingly investors showed preference towards assets such as Land Development, Healthcare, Retail and Logistics etc.ESG will continue to gain prominence as key influence in property purchasedecisions in 2022.”
PROPERTY INVESTMENT PORTFOLIO: PROPORTION ALLOCATED TO EACH PROPERTY TYPE
The survey further reveals that 31% of the respondents have invested in office followed by 15% in Retail, Residential Private Rented Sector (PRS) and Development Land each in 2021. All wealthy investors want more ESG-compliant assets to futureproof their portfolios. 77% of Indian respondentsexpect an increasing opportunity in ESG for creating and preserving wealth.
PROPORTION ALLOCATED TO EACH PROPERTY TYPE
| Sectors | 2021 |
| Office | 31% |
| Development Land | 15% |
| Residential private rented sector (PRS) | 15% |
| Retail | 15% |
| Logistics | 8% |
| Industrial | 8% |
| Healthcare | 8% |
| Hotels and leisure | 8% |
| Lifesciences | 0% |
| Student housing | 0% |
| Retirement | 0% |
| Agricultural | 0% |
| Data centers | 0% |
| Education | 0% |
| Others | 0% |
Source: The Wealth Report Attitudes Survey 2022
Liam Bailey, Global Head of Research at Knight Frank said, “The Wealth Report confirms a clear rise in demand for residential property – with 26% of global UHNWIs looking to buy a new home in 2021, a sharp increase from the 21% we revealed in 2020. Demand is especially strong for rural and coastal properties, with access to open space being the most highly desired feature. The pandemic is super-charging demand for locations that offer a surfeit of wellness – think mountains, lakes, and coastal hot-spots. Demand will help fuel price rises of up to 7% for our key markets this year.”
