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London to remain capital of global investment

by Deleted Subscriber Content
28th Mar 12 3:04 pm

London has cemented its place as the most important city in the world for high-net worth individuals (HNWIs), research has shown.

The latest version of The Wealth Report, compiled by Knight Frank and Citi Private Bank, also predicts London will remain the top location in the property and investment markets for the next decade.

This will be a welcome boost for the capital following the financial uncertainty in Europe over the last 12 months.

Citi Private Bank’s wealth advisers from around the world and Knight Frank’s global network of luxury property specialists were questioned for the survey.

These HNWIs were asked to list their favourite cities across four different categories: Quality of Life, Knowledge and Influence, Political Power and Economic Activity.

London topped all of them apart from Political Power, finishing behind Washington DC in second place.

Liam Bailey, Knight Frank’s global head of residential research, outlined how the money flowing into London’s property market has been “super-charged” by political risk elsewhere.

“The world’s wealthy, especially in emerging markets, are nervous about arbitrary rule and policy change in their home countries, and how this potentially impacts on their ability to protect their wealth – so they are moving money, and increasingly their families, to more stable environments,” he said.

“Their house purchases are effectively triple-A rated bond investments – which happen to have a London postcode.”

The key factors highlighted by respondents for choosing a global city included personal security (63 per cent), education, stability and business transparency.

When asked which cities they think will be the most important in 2022, the HNWIs once again picked out London.

However, with the ongoing emergence of Far East markets, Beijing and Shanghai pushed London back to third in the ‘Fastest Growing in Importance’ list.

The report shows that by 2050 many commentators believe Shanghai will be in a position to usurp London, but some still believe the capital’s reputation as a safe pair of hands will keep it at the top.

Dr Savvas Verdis, chief executive of Rankdesk, stated in the report: “London will continue [to be a leading global city of the future] if it continues to follow structural adjustments in its economy.

“These include bringing large institutional investors into the rental market, which will turn Londoners into renters rather than owners and divert the surplus from real estate into more productive capital.”

Meanwhile, David Adam, managing director of Global Cities, told researchers that the diversity of places like London and New York will help them fend off the East Asian challenge.

He said:”More than one-third of people in New York and London are foreign born.

“Despite their astonishing growth, Asian economic powerhouses fail to reach that level of cosmopolitan culture.

“New York or London will continue to top the indices, but only if they ensure their strong cultural offers are unmatched and maintain open immigration policies.”

 

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