“The Wealth Report” by Knight Frank, has revealed that South Africa and Kenya are the preferred African states for wealthy individuals investing in real estate. The report indicates that the combined loss of wealth for the wealthy was $10 trillion. South Africa has the ability to attract the widest spread of investment into Africa, followed by Kenya.
The report highlights that investors in Kenya owning rented property increased from 44% to 70%, while those owning retail properties rose from 41% in 2021 to 70% in 2022. Respondents globally are looking to invest in healthcare-related assets in 2023, and the report outlines other areas of investment, including private rented sectors, leisure, hotels, student accommodation, life sciences, and data centres.
Out of the 100 prime markets tracked in Knight Frank’s Prime International Residential Index (PIRI 100), 85 recorded positive or flat price growth in 2022. Dubai topped the list for the second year in a row as a second home hub for global Ultra High Net Worth Individuals (UHNWIs), helped by various visa initiatives. Coastal and rural locations in sunnier climes saw an average price growth of 8.4%, marginally ahead of ski resorts, which were up 8.3% on average, surpassing their 2021 record.
The Americas narrowly pipped Europe, the Middle East, and Africa to the title of top-performing region, with a growth rate of seven percent compared to 6.5% for Europe, the Middle East, and Africa, and 0.4% for Asia-Pacific. Cape Town in South Africa moved up an impressive 63 places in the past year from 94th to 31st on the Prime International Residential Index (PIRI).
The report notes that the decline in wealth is unsurprising given the dramatic pivot in monetary policy, which resulted in the worst performance for the traditional blended portfolio since the 1930s. Europe saw the largest decline in wealth, with a drop of 17%, followed by Australasia with 11% and the Americas by 10%. Africa and Asia saw the smallest declines, with 5% and 7%, respectively.
Overall, the report suggests that wealthy individuals are looking to invest in a diverse range of assets, including healthcare-related assets, private rented sectors, leisure, hotels, student accommodation, life sciences, and data centres. South Africa and Kenya are among the preferred African states for real estate investment, and Cape Town has emerged as a prime market for luxury property. The decline in wealth is attributed to a pivot in monetary policy, with Europe experiencing the largest decline in wealth.