Even though 2022 was marred by an extended era of instability and insecurity, 88 percent or nearly 9 out of 10 Indian ultra-high-net-worth individuals (UHNWIs) saw their wealth grow during that year, according to Knight Frank’s latest report - The Wealth Report: Outlook 2023.
A total wealth shift of over 10 percent was seen by almost 35 percent of Indian UHNWIs. Bonds, real estate, and equities together accounted for 84 percent of the investable wealth of Indian UHNWIs.
At 34 percent, equities made up the largest portion of investable wealth in 2022. Commercial properties received a sizable chunk of the 25 percent allocation. 16 percent of UHNWIs' investable wealth was allocated to bonds as a way to find stability in an uncertain environment.
The expansion of commercial assets as an investment category with significant allocation, according to the research, was an indication of increased investor confidence in India's growth story.
As per the report, global and Asia-Pacific (APAC) region respondents, largely represented more mature real estate markets, with exposures of 33 percent and 35 percent respectively in commercial real estate through direct owners, funds, and real estate investment trust (REITs).
The Indian respondents predict that in 2023, the wealth of the ultra-wealthy would continue to rise. While 53 percent anticipate wealth to increase by at least 10 percent over the previous year, 47 percent anticipate wealth to rise by more than 10 percent.
69 percent of respondents worldwide believe that wealth will increase, while 14 percent believe that wealth will decrease.
“With 69% 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. 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,” said Liam Bailey, Global Head of Research at Knight Frank.
In addition, 4 percent of Indian UHNWIs are anticipated to seek passion-driven assets rather than financial benefits, according to the Attitudes Survey.
In 2023, 53 percent of UHNWIs are expected to spend on art, watches, and high-end handbags, which continue to be the most popular investments of passion. The other most sought-after passion-driven investments for 2023 are vintage automobiles, fine wine, and furnishings.