London will continue attracting the super-rich even as Brexit bites, says report

Skyline of buildings in the City of London.
Skyline of buildings in the City of London. PHOTO: AFP

GENEVA (BLOOMBERG) - The super-rich will continue to flock to London, despite the political and economic concerns around the UK's intention to leave the European Union, according to a report published on Wednesday (March 1) by property broker Knight Frank.

The number of ultra-wealthy people - those with US$30 million or more who private banks such as UBS Group and Citigroup love to court - living in the UK capital is expected to climb by 30 per cent to 6,058 over the next decade, the report showed.

That may ease doubts about the city's appeal stemming from an 80 per cent slump in applications for investor visas last year, following the introduction of anti-money laundering checks in 2014. Only 215 wealthy people were granted such visas, according to data published last week by the UK government.

New York retains the top spot worldwide as expectations for US economic growth override a period of uncertainty as the Trump presidency takes shape, according to the Knight Frank report, which cited research by Johannesburg-based consultancy New World Wealth.

The number of ultra-high-net-worth individuals globally rose to more than 193,000 in 2016, helped by stock-market gains. It will exceed 275,000 by 2026, advancing most swiftly in Vietnam, Sri Lanka, India and China, according to the report.

"Burgeoning economic growth in some countries is providing many opportunities for wealth creation," Andrew Amoils, head of research at New World Wealth, said in the report.

China will grow even more rapidly if it creates more high-tech companies such as Huawei Technologies, he said in a separate email.

The number of billionaires will soar to 3,000 over the next 10 years as faster-growing economies such as China and India create new wealth, the report showed. The development of high-tech, financial services, media and health-care industries in these countries is expected to help boost private wealth for a 48 percent global increase in people with US$1 billion or more in net assets.

Asian cities led by Pune, Ho Chi Minh City, Hyderabad and Bangalore are expected to be among those with the most rapid ultra-wealthy population growth over the next 10 years. At the same time, Mumbai will probably join Shanghai, Beijing, Singapore and Hong Kong in the top 10 locations for the super-rich.

Not all regions are expected to show such stellar growth rates. The ultra-wealthy populations of Germany, France, Italy and Spain will have lacklustre growth, with some affluent individuals expected to leave continental Europe, according to the report.

Constraints include "a combination of rising taxes and higher state-pension obligations and public health-care costs, and the loss of high-skilled jobs to Asia," Amoils said in the report.

Ultra-wealthy migrants are expected to cluster around at least half a dozen "safe haven" jurisdictions such as the United Arab Emirates, Monaco, Israel and Canada, lured by fiscal and political stability and a better quality of life, according to the report.

The Ras Al Akhdar development in the UAE's Abu Dhabi, for example, is already home to almost 400 ultra-high-net-worth individuals, Knight Frank said.