GLOBAL – The value of deals involving ultra-prime residential property in capitals dominated by financial services will increase by one-quarter by 2017, according to a report by Candy & Candy, Savills and Deutsche Bank.
Sales of 300 assets worth more than £10m (€11.8m) in London, New York, Hong Kong and Singapore totalled £6.6bn in 2012.
The report anticipates 400 sales will generate £8.4bn in 2017.
Basing their findings on the growth of the "international super-rich" in emerging markets, the report's authors forecast a growth in global wealth from $122trn (€93.6trn) to $150trn in the same period.
The report said: "A trophy 'safe haven' property in a global city is typically at the top of the shopping list for wealthy individuals, and their continuing appetite for such investment is expected to exert even greater influence over global property markets in the next few years."
Although it failed to see a "noticeable impact" to date, the report acknowledged the imposition of a so-called mansion tax by the UK government could "put off investors down the line".
However, it also observed a trend for Asian high net worth individuals (HNWIs) to target assets outside the UK capital in a bid for yield rather than capital preservation.
The report's case is predicated on the extension of ultra-prime locations and new assets expanding existing supply.
However, London shows few signs of a significant increase in supply of prime or ultra-prime supply.
David Marks, managing partner of Brockton Capital, claimed earlier this week that London prime residential supply and demand were "completely out of whack".
He cited data suggesting 175,000 ultra-HNWIs would seek assets in London, compared with 50-100 units annually likely to be delivered onto the market.
"It makes the prime end of the market very robust," he said.
"Unless the [UK] government really wants to mess it up – for instance, with another mansion tax – it looks pretty good."
