India's super-rich gear up for a better year ahead: Knight Frank

• 100% UHNIs in India expect their wealth to grow in 2023, compared to 69% globally.
  
• 15% Indian UHNIs held residential property abroad as compared to 28% globally.
  
• For UHNIs, the top segments for wealth allocation were equities, direct commercial property, bonds and private equity.
  
• For the first time, private investment surpassed institutional investment in global commercial real estate.

Last year was good for Indian ultra high networth individuals or UHNIs – as 88% of them reported growth in their wealth. Globally, only 40% of the super rich could make the same claim as per a report by property consultant Knight Frank.

It hence comes as no surprise that all of them – 100% of Indian UHNIs — expect their wealth to grow even in 2023, says The Wealth Report 2023. Globally, 69% of them expect good tidings this year.

In India, 19% of Indian super rich are self-made and under 40 years, while globally they account for 23%. UHNIs or the super-rich are defined as those who have an investable surplus of ₹25 crore or more.

A bad year for global wealth

The year of 2022 however was a wealth destroyer, the aggregate global wealth fell by 10%. The most hit was Europe which was on the receiving end of the Russia-Ukraine war – whose wealth fell by 17%. In Asia and Middle East regions, it fell by 7% each, and 10% in the Americas.

Globally, in 2022, private investors were the most active buyers in global commercial real estate investment. They invested $455 billion accounting for 41% of the total.

“This represents private investors’ highest share of global commercial real estate on record and is the first-time private investment has surpassed institutional investment,” Knight Frank said.

More wealth to secondary homes

The report also revealed interesting insights regarding home ownership of Indian UHNIs. On average, they own an average of 5.1 homes, while the global number is 4.1. The wealth allocation to primary and secondary homes was 37% for Indians, and 32% globally.

Only 15% Indian UHNWIs held residential property abroad as compared to 28% globally. Interestingly, the top favoured countries for home purchase for Indian super rich in 2022 were UK (47%), UAE (41%), USA (29%) and Canada (18%).

As many as 21% of Indian UHNIs considered making commercial property investments, and slightly higher than the global average.

Bags, not classic cars

Most UHNIs allocate most of their wealth into equity markets — at 34%. Next comes direct commercial property (17%), bond market (16%) and private equity (10%).

Art, watches and luxury handbags were the top three investments of passion for Indians. Globally, art, classic cars and jewelry were the top three.

Capital appreciation vs preservation

In 2023, 31% UHNIs said that capital appreciation was their biggest goal for wealth, while 25% said that their biggest goal was capital preservation.

Income generation (25%) and diversification(14%) were the next biggest goals. Also, one-third of the respondents said that they want to expand property holdings while 29% said that they want to deleverage.

When it came to the safest asset class, residential property was considered the safest, followed by gold, bonds, commercial property and equity markets.

Cryptocurrencies were considered as the most volatile asset. The report also revealed that 77% UHNIs feel that environmental considerations impact their investment decision to some extent.

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