Personal Finance

Cities that the super-rich pick

OUR CHENNAI BUREAU | Updated on April 09, 2011

Lifestyle and investment are the key drivers for luxury second-home purchases, especially among Asian super rich.

The 2011 edition of The Wealth Report, launched earlier this week by Knight Frank and Citi Private Bank, shows that prime property remains incredibly important to the world's wealthiest people. On an average, property accounts for 35 per cent of Ultra High Net Worth Individuals' investment portfolios, second in importance only to investing in their own businesses.

Almost 40 per cent of the 85 prime city and second-home locations in 40 countries that were analysed by the report's Prime International Index (Piri) rose in value during 2010, 17 of them by 10 per cent or more. Six of the 10 biggest risers were in Asia, highlighting the region's continuing economic surge, but established centres such as London and New York also performed strongly. A number of locations, however, saw values fall significantly. These include Dublin (-25 per cent) and Dubai (-10 per cent).

Lifestyle and investment are the key drivers for luxury second-home purchases, but education is of growing importance, especially among Asian super rich.

For those UHNWIs who change their main country of residence, tax is the biggest motivator. New York and London remain at the head of The Wealth Report's Global Cities Index, but respondents to the Attitudes Survey predict that Asian cities such as Shanghai and Mumbai will start to close the gap over the next 10 years.

The collective worth of the global HNWI community increased by 22 per cent last year, according to the 2011 Wealth Report, so it is not surprising that many of the world's luxury property markets benefitted.

The biggest increase in wealth was in Asia Pacific (35 per cent) and that is where the biggest increases in property prices were recorded. The Wealth Report offers a unique and global perspective on the world of prime property and wealth.

Supreme Infra bags Rs 390-cr deals

Supreme Infrastructure India Ltd has bagged in four new construction contracts totalling Rs 389.15 crore, according to a press release from the company. The orders include construction of multi-storey buildings complex named ‘Oswal Green' in Chembur, Mumbai from Oswal Chemicals and Fertilisers Ltd. The project has been awarded in joint venture in which the company has the majority stake. The value of the project is Rs 270 crore; another order is for the construction of a building for ESIC at Andheri, Mumbai from National Buildings Construction Corporation Limited. The value of the project is Rs 90.24 crore and will be executed in 15 months; the third order for Rs 22 crore is for the construction of 39-floor tower for Orbit Corporation named ‘Orbit Enclave' at Prarthna Samaj, Mumbai; and another is for a residential bungalow at Juhu, Mumbai, from Creative Marketing and Investment Pvt Ltd. The value of the project is Rs. 6.91 crore.

Since all the sites are located in Mumbai, the company shall cater to the requirement of concrete from its existing RMC Units in Mumbai which will be a huge added benefit at operational level and in turn boost the economies of the backward integration model of the company, coupled with the least requirement for additional capex. A key differentiator is its backward integration model where the company has built significant capabilities in quarrying business, giving it high control over aggregrates (a key raw material in construction).

Strong show by Cushman & Wakefield

International property consultants Cushman & Wakefield has reported a strong revenue growth for the year ending December 2010, according to a press release from the company.

This is tied closely to the company's leadership position in the world's major business districts – markets that have been at the forefront of the commercial real estate recovery to date. For the full year 2010, net income on a US GAAP basis was $25.7 million, compared to a full year 2009 net loss of $115.8 million. Full year commission and service fee revenue totalled $1.4 billion, an improvement of 16 per cent from prior year revenue of $1.2 billion. Full year 2010 gross revenue totalled approximately $1.8 billion.

“Last year represented the start of a global recovery in commercial real estate services prompted by decision making with regard to pen- up demand for capital allocation and to provide for occupier space needs,” said Mr Glenn J. Rufrano, President and Chief Executive Officer of Cushman & Wakefield, in the press release.

“Much of the capital activity was the result of demand for core assets in core markets worldwide from an occupier and investor standpoint, and increased availability of capital. We see these trends continuing.” During 2010, Cushman & Wakefield was involved in more than 27,000 property sales and leasing transactions, with an aggregate value of nearly $67 billion.

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Published on April 09, 2011

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