Wealth of 9 in every 10 ultra-rich Indians rose in '22: Knight Frank report

This was more than the global average where 4 in every 10 UHNWI saw wealth growth

The wealth of nine out of every 10 ultra-high-net-worth individuals (UHNWIs) in India increased in 2022, according to a report by real estate company Knight Frank. This is more than double the global average where four in every 10 enjoyed wealth growth.

According to the "Wealth Report 2023 Attitude Survey: India Findings" released on Monday, 35 per cent of the UHNWI Indians saw their wealth change by over 10 per cent.

"While the prolonged economic and geopolitical crisis continued to weigh down most of the prominent economies, India's resilient economic performance allowed the country to beat global trends in the year of permacrisis," the report said.

It added that a UHNWI in India owns 5.1 homes, which is higher than the global average of 4.1. And 37 per cent of the wealth of Indian UHNWIs is allocated to primary and secondary homes. This, too, is higher than the global average of 32 per cent.

Also, 84 per cent of the investable wealth of Indian UHNWIs is allocated between equities, real estate and bonds. Among these, the equity market emerged as the top segment with 34 per cent of their total wealth invested in it. It was followed by commercial property (25 per cent) and the bond market (16 per cent).

Globally, the highest amount of funds (33 per cent) was allocated to commercial property.

Liam Bailey, global head of research at Knight Frank, said that there will be a shift in the investment pattern in the coming year with more focus on real estate.

"With 69 per cent of UHNWIs expecting to see wealth growth in 2023 – we are anticipating a substantial shift in portfolio strategy – with a search for value opportunities in the real estate sector playing a much bigger role than in recent years,” he said. “Downward pressure on property values, due to higher interest rates, has created a window for private capital – especially as we enter this new market phase with historic lows in terms of the stock of best-in-class property in residential and commercial markets."

In 2023, 100 per cent of the UHNWIs in India and 69 per cent globally expect their wealth to grow.

While 47 per cent of those in India expect wealth to increase by more than 10 per cent, 53 per cent expect wealth to rise by at least 10 per cent.

"The optimism of the ultra-wealthy on wealth generation here is far higher than their global counterparts and this shall serve as the bedrock of investment and consumption decisions," said Shishir Baijal, chairman and managing director, Knight Frank India.

"The tumultuous global macro-economic environment and high interest rates will have its influence on market sentiments. However, the new market phase with best-in-class real estate in residential and commercial segments is expected to witness continued demand," he added.

In another report released earlier this month, Knight Frank had said that housing sales in India rose 34 per cent to a nine-year high and gross office leasing grew 36 per cent during 2022 across eight major cities in India.

"India will have to remain cautious of the global geopolitical and economic challenges as that can cast a shadow on the pace of growth for India," Baijal had then cautioned.

What UHNWIs want

• Art remains the first choice as the "investment of passion" in India followed by watches and luxury handbags
• UK most favoured country for home investment; UAE and USA follow
• 18% Indian UHNWIs want to apply for a new citizenship in 2023
• 19% self-made Indian UHNWIs below the age of 40. Global average is 23%