Knight Frank - The Wealth Report: Outlook 2023
In The Wealth Report: Outlook 2023, The Knight Frank Intelligence Lab examines the key investment risks and opportunities wealthy investors are focussing on for the year ahead.
Using data from Knight Frank’s annual Attitudes Survey of more than 500 private bankers, wealth advisors and family offices combined with in-depth conversations with industry experts, we bring you our assessment of the key themes for wealth and investment markets in 2023.
Ten themes for 2023
Key takeaways from The Wealth Report: Outlook 2023: -
1. Global movement has been tempered by the pandemic, but the desire to be mobile is proving resilient. Some 13% of UHNWIs are planning to apply for a second passport or new citizenship, down only slightly from the 15% recorded in our 2022 report.
2. Globally, a third of total wealth is allocated to UHNWI’s primary and secondary homes, of this allocation more than a quarter is held outside their country of residence. UHNWIs in the Middle East have the highest global footprint (41%).
3. The average UHNWI owns 4.2 homes globally.
4. Higher interest rates will temper demand for residential property in 2023. Some 15% of UHNWIs are looking to purchase a residential property this year down from 21% in the previous year’s survey. Appetite is highest amongst Middle Eastern UHNWIs.
5. The US, UK and Spain are the top three locations for purchasing homes. Australia and France round out the top five.
6. UHNWIs are increasingly diverse both by geography and asset class. More than a fifth of respondents’ investable wealth is directly invested in commercial property with a similar proportion held overseas.
7. Real estate was identified as a top opportunity, both for direct and indirect investment. One in five UHNWIs are planning to invest directly in 2023, with 13% looking for indirect opportunities.
8. Healthcare, logistics/industrial and offices are the top target sectors for UHNWIs in 2023. The private rented residential sector and hotels/leisure complete the top five. Around a third of respondents are interested in each of the top five sectors in 2023.
9. Energy source (57%), opportunity for refurbishments (33%) and materials used/the embodied carbon footprint (30%) are increasingly being looked at by UHNWIs when purchasing investment property.
10. Art is set to remain the most sought-after investment of passion in 2023 with 59% of UHNWIs likely to make a purchase this year. Watches come in second, with 46% looking to purchase, followed by wine with 39%. In terms of how much they will spend – art is again at the top, followed by classic cars and wine.
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