In 2007, Asian participation in big-ticket commercial real estate deals was 22% of the market by value. Since 2010, it has averaged 50%. Most of this increase has been from the private wealth sector. At least 45% of all big-ticket real estate deals in Asia were made by private individuals and private companies.

It is perhaps unsurprising that the participation of private Asian wealth has been so great in real estate of late. Around 7% of all UHNWIs in the region made their fortunes from the sector. This is a higher proportion than in any other global region apart from Oceania. Asian UHNWIs have made more money from real estate than other nationalities.The average total wealth of those making money from real estate in Asia is US$610 million.

Most UHNWIs direct property holdings are homes (including multiple second homes). North Americans have overwhelmingly invested in this type of property and Asians too are similarly conservative in their direct property holdings. Other types of property are more likely to be held in companies and other investing vehicles than held directly.

Other nationalities have more significant direct holdings (up to 20%) of other types of property. Europeans and Oceanians are more likely to hold farms, estates, ranches. Likewise Africans will hold land: rural, resort or urban, in direct ownership and Latin Americans will hold commercial property directly. Middle Easterners seem to have around 17% of their directly owned property in a well-balanced mix of real asset types. It also has the highest average value at over US$35 million, while North American holdings are much lower in value, averaging US$5 million.

Most holders of direct real estate are more likely to own it in their home region than anywhere else – this is overwhelmingly the case for North Americans. Latin Americans, on the other hand, are exceptional in eschewing their homeland in favour of direct holdings north of the border. Africans are the next most likely to invest somewhere other than their home territory and when they do they favour European destinations. Asians, Europeans and Oceanians are all most likely to buy in North America than any other global region when investing overseas, followed by Europe. There would therefore seem to be a preference for “safe haven”, old world destinations for direct real estate holdings among UHNWIs.

The overall value of direct property holdings is highest in Europe, partly due to the number of investors, but also due to high average values in the region. The number of Asian UHNWIs with direct property holdings is smaller, even though the average value is higher.

Taken from
Around the World in Cents and Dollars