The Republic has been ranked the fifth most important city in the world – up two notches from its previous ranking – by high-net-worth individuals (HNWIs), according to The Wealth Report 2012 by Citi Private Bank and property consultancy Knight Frank.
London took top spot in the ranking, followed by New York, Hong Kong and Paris.
The survey assesses the importance of key cities to HNWIs based on the state of world affairs, opportunities for wealth creation, economic risks and political stability.
When asked for their views on leading cities in 10 years’ time, the respondents kept Singapore, London and New York in their current spots.
Beijing and Shanghai were viewed as the fastest-growing, reflecting the impact of the flourishing economies of the East. They were deemed to be the third and fourth most important cities in 10 years, knocking Paris and Hong Kong down the list.
HNWIs are keen on investing in prime residential and commercial properties in these top global cities because they are viewed as “safe havens” for long-term investments or as second homes, Knight Frank said.
“If you look at property investment, most of the HNWIs’ attitudes have changed … for the longer-term perspective and a longer holding period,” said Mr Png Poh Soon, head of consultancy and research at Knight Frank.
“Nobody wants to make a loss. So certainly people are concerned about the impact of the market,” he added.
Despite cooling measures, experts say luxury property prices here will remain resilient due to the continued interest among the global super-rich in Singapore properties.
The survey was conducted on 4,000 individuals worth an average of US$100 million (S$126 million) each.
Source : Today – 31 Mar 2012
S'pore luxury property market still resilient
Business Times: Sat, Mar 31
SINGAPORE luxury property remains resilient despite the government's cooling measures, as the wealthy look to the city as a 'safe haven' and a lifestyle destination.
This is one of the highlights of Knight Frank's The Wealth Report 2012, produced in collaboration with Citi Private Bank.
A survey of 4,000 individuals worth an average of US$100 million each cites Singapore as the fifth most favoured second home location across all respondents. In pole position was the United States, followed by the United Kingdom, France and Spain.
In terms of quality of life, Singapore took second place, after London.
The study reflects the growing shift in emphasis towards the East, where the number of 'centa-millionaires' - defined as those with a net worth of at least US$100 million in investible assets - is growing rapidly.
For instance, the current ranking of the most important global cities finds Singapore in fifth spot, after London, New York and Hong Kong. Shanghai and Beijing were ranked eighth and ninth, respectively.
In 10 years, based on the expectations of survey respondents, Singapore continues to take the fifth spot. But Beijing and Shanghai moved up to third and fourth places, respectively.
In terms of the rise in the number of centa-millionaires, the fastest growth by far between 2011 and 2016 is projected to occur in Africa, South and Central Asia, the Middle East and South-east Asia.
Property remains a favoured asset among high net worth individuals. It has the biggest share of 31 per cent of portfolios on average, and equities and bonds have 31 per cent each in 2011. In the Asia-Pacific, however, property's share of portfolios is higher at 31 per cent, with equities taking 24 per cent and bonds 16 per cent.
The study finds that 57 per cent of the ultra high net worth individuals expect to increase their residential property portfolio. The growing wealth market has led to the emergence of 'super prime' markets, characterised by transactions of at least US$20 million each. Of these transactions, foreign buyers typically account for a quarter. In Asia-Pacific, Singapore and Hong Kong are super-prime markets, but Shanghai may well emerge as one too.
The report notes that Asian markets such as Singapore and China have implemented property cooling measures which have hit prices somewhat last year.
In Singapore, however, Knight Frank director of valuation and head of consultancy and research Png Poh Soon believes the demand for prime residential property among foreign buyers remains intact.
'The trend among foreign buyers implies that notwithstanding the Additional Buyers Stamp Duty (ABSD), ultimately the rich will buy Singapore property. We are confident of the long-term performance of the luxury residential market.' This, he added, is due to a number of factors such as Singapore's stable political and economic environment; its safe haven status for capital and it offers an attractive lifestyle.
In terms of investment themes, Citi Private Bank head of investment (Asia Pacific) Debashish Duttagupta said clients should 'intensify their quest for yield'. 'It's our view that rates will stay low and risk free yields will stay low. This has deep implications for real estate markets.' With this backdrop, he adds, financial investments will also continue to outperform.
He suggests that clients could construct real estate investments including commercial property that behave like a fixed rate bond in terms of its yield.
Dividend stocks are also an attractive
option. 'It does not mean that in a market rally dividend stocks
underperform. Our studies show that when equity markets rally strongly,
dividend yield stocks outperform growth and value stocks.'