Asia still leads the world when it comes to minting billionaires

India (pictured) leads the world with an expected 39 per cent surge, followed by the Philippines and China.
India (pictured) leads the world with an expected 39 per cent surge, followed by the Philippines and China.PHOTO: BLOOMBERG

HONG KONG (BLOOMBERG) - Asia will see the fastest billionaire population growth in the world over the next four years, despite economic uncertainties in the region triggered by the China-US trade war.

The number of Asian billionaires will rise by 27 per cent to 1,003 between 2018 and 2023, making up more than a third of the world's total billionaire population of 2,696, according to a report released Wednesday (March 6) by Knight Frank LLP.

The billionaire population growth rates for North America and Europe are 17 per cent and 18 per cent respectively.

Asia will also see the biggest increase in ultra-high net worth individuals, defined as people with net assets of US$30 million (S$40.70 million) or more.

India leads the world with an expected 39 per cent surge, followed by the Philippines and China.

But while the rich may be getting richer, they're also becoming more cautious. An increasing number of individuals in Asia plan to keep more of their wealth in cash and less in assets exposed to market cycles such as gold or bonds.

Property remains a mainstay of their portfolios, the Knight Frank's 2019 Wealth Report found: real estate comprises around 23 per cent, slightly higher than the global average.

"We are seeing a re-balancing of portfolios away from equities toward more defensive asset classes," said Mr Nicholas Holt, Knight Frank Asia Pacific's head of research.

"While cash, gold and private equity are likely to be increasingly targeted, investment-grade property with strong tenant covenants will also see significant interest over the next 12 months."

Investors in the Philippines were most likely to put more money into real estate, the survey found, while 40 per cent of respondents in Australia, in the midst of a property-market downturn, expected allocations to real estate to decrease over the coming 12 months.

 
 
 
 

And with their private jets and multiple houses, the report found that world's mega-rich are the ultimate globetrotters.

Yet about half of this elite population have their main residences within a group of just 10 cities, according to the report, which lists London, Tokyo and Singapore as home to the most people worth of at least US$30 million.

Although the US is the world's largest economy, New York is its only city in the real estate brokerage's top 10.

The data highlight the concentration of the ultra-wealthy living in the biggest metropolises. Business opportunities, lifestyle desires, hospitals and transportation infrastructure are all factors that draw the super-rich to splash out on homes in large cities.

That's especially true with London - the UK's political and financial centre, and the world's top wealth hub - where foreign property buyers have faced criticism for pushing up prices.

London's richest include members of the billionaire Rausing family, who own packaging company Tetra Laval, and Chelsea neighborhood landowner Charles Cadogan.

"London has a very unique proposition," said Liam Bailey, Knight Frank's global head of residential research. "There's no other city that compares as a global hub for so many different sectors."

The world had almost 200,000 ultra-high-net worth individuals last year, according to the broker's wealth study, with more than two-thirds of them across Asia, Europe and North America. Europe is the biggest regional centre for this population globally, while the surge among Asian economies means the world will have more than 20 million people worth at least US$1 million for the first time this year.

WHISKY, CARS

Asia's economic growth is boosting luxury investments worldwide. Last year, China and Hong Kong buyers accounted for about a quarter of purchases in London homes worth at least 2 million pounds (S$3.57 million), according to Knight Frank, almost doubling from two years earlier.

The region's rich also boosted demand for luxury collectibles, helping push the broker's Rare Whisky 100 Index up 40 per cent last year.

Rarity and provenance also drove sales of art and vintage cars to new highs in 2018. Highlights include the US$48 million auction of a 1962 Ferrari 250 GTO and the US$90.3 million bid for a David Hockney painting, the most paid at auction for a work by a living artist.

"Direct flights between Edinburgh and Beijing point to the growth of whisky as an asset class," Mr Bailey said in reference to routes introduced last year by China's Hainan Airlines. "There's still a desire for wealthy individuals to dedicate part of their portfolios to tangible items."