The United Kingdom topped the ranks in 2019 as the number one destination for foreign investment into commercial property.
In a report by Knight Frank called Wealth Report 2020, the agency reveals that private capital was responsible for circa £267.53 billion of all commercial real estate purchases in 2019. The latter being a 5% rise compared to the previous year.
According to Knight Frank’s annual Attitudes Survey, wealthy individuals confirmed that property remains the most attractive asset class when compared to traditional equities and bonds, due to its relative stability and higher returns.
Of the individuals surveyed, 78% are set to increase or maintain their current allocations to property, ahead of bonds and equities, which saw 68% and 62% of respondents seeking to increase or maintain investment, respectively.
Although 24% of global wealthy plan to invest in commercial property domestically, a significant amount of capital is set to be allocated to cross border purchases in the next 12 months. In fact, 32% of wealthy investors from the Middle East and 24% from Latin America are targeting overseas commercial property opportunities.
The primary target for private capital investors is the office sector with healthcare, hotels and leisure following closely behind. Investors are reallocating funds due to structural change and uncertainty in other core sectors.
Taking a closer look at the wealthy individuals, the number of ultra-high-net worth-individuals (UHNWIs) rose by 6% in 2019, taking the total to more than 513,200. UHNWIs are defined as those individuals with £25 million or more in net assets.