2011wealth Report Knight Frank

8/13/2019 2011wealth Report Knight Frank

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THEWEALTHREPORT

A GLOBAL PER SPECTIVEON PRIME P ROPERTY

AND WEALTH


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THE SMALL PRINT

TERMS AND DEFINITIONSHNWI is an acronym for high-net-worth individual, a person whose investible assets, excluding their principal residence,total between $1m and $10m. An UHNWI (ultra-high-net-worth individual) is a person whose investible assets, excludingtheir primary residence, are valued at over $10m. The term prime property equates to the most desirable, and normallymost expensive, property in a defined location. Commonly, but not exclusively, prime property markets are areas wheredemand has a significant international bias. The Wealth Reportwas written in late 2010 and early 2011. Due to rounding,some percentages may not add up to 100.

For research enquiries Liam Bailey, Knight Frank LLP, 55 Baker Street, London W1U 8AN+44 (0)20 7861 5133

Published on behalf of Knight Frank and Citi Private Bank byThink, The Pall Mall Deposit, 124-128 Barlby Road, London, W10 6BL.

THE WEALTH REPORT TEAM

FOR KNIGHT FRANKEditor: Andrew ShirleyAssistant editor: Vicki ShielDirector of research content: Liam BaileyInternational data coordinator: Kate Everett-AllenMarketing: Victoria Kinnard, Rebecca MaherPublic relations: Rosie Cade

FOR CITI PRIVATE BANKMarketing: Pauline Loohuis

Public relations: Adam Castellani

FOR THINKConsultant editor: Ben WalkerCreative director: Ewan BuckChief sub-editor: James DebensSub-editor: Jasmine MaloneSenior account manager: Kirsty GrantManaging director: Polly Arnold

Illustrations: Raymond Biesinger (covers), Peter Field (portraits)Infographics: Leonard Dickinson, Paul Wooton, Mikey CarrImages: 4Corners Images, Getty Images, Bridgeman Art Library

PRINTINGRonan Daly at Pureprint Group Limited

DISCLAIMERS

KNIGHT FRANKThe Wealth Report is produced for general interest only; it is not definitive. It must not be relied upon in any way. Although high standards have been used in the preparationof the information, analysis and views presented in The Wealth Report, no responsibility or liability whatsoever can be accepted by Knight Frank for the contents. We makeno express or implied guarantee of its accuracy.

As far as applicable laws allow, we do not accept responsibility for errors, inaccuracies or omissions, nor for loss or damage that may result directly or indirectly from relianceon its contents. The Wealth Report does not necessarily reflect the view of Knight Frank in any respect. Readers should not take or omit to take any action as a result ofinformation in The Wealth Report. In preparing The Wealth Report, Knight Frank does not imply or establish any client, advisory, financial or professional relationship.ThroughThe Wealth Report, neither Knight Frank nor any other person is providing advisory, financial or other services. In particular, Knight Frank LLP is not authorised bythe Financial Services Authority to undertake regulated activities (other than limited insurance intermediation activity in connection with property management).

Knight Frank LLP 2011.

Reproduction of this report in whole or in part is not permitted without the prior written approval of Knight Frank LLP.

Knight Frank LLP also trades as Knight Frank. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registeredoffice is 55 Baker Street, London, W1U 8AN, where you may look at a list of members names.The Wealth Report is compiled from information contributed by various sources including Knight Frank LLP, its direct UK subsidiaries and a network of separate andindependent overseas entities or practices offering property services. Together, these are generally known as the Knight Frank global network. Each entity or practice in theKnight Frank global network is a distinct and separate legal entity. Its ownership and management is distinct from that of any other entity or practice, whether operatingunder the name Knight Frank or otherwise. In any event, no entity or practice operating under the name Knight Frank (including Knight Frank LLP) is liable for the acts oromissions of any other entity or practice. Nor does it act as agent for or have any authority (whether actual, apparent, implied or otherwise) to represent, bind or oblige inany way any other entity or practice that operates under the name Knight Frank (including Knight Frank LLP). Where applicable, references to Knight Frank include theKnight Frank global network.

CITI PRIVATE BANKThe Wealth Report is provided as a service to c lients of Citi Private Bank. The views expressed herein are those of Knight Frank LLP and associates, and do not necessarilyreflect the views of Citi Private Bank, Citigroup Inc., Citigroup Global Markets Inc., and its affiliates. All opinions are subject to change without notice. Neither the

information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.Citi Private Bank is a business of Citigroup Inc. (Citigroup), which provides its clients access to a broad array of products and services available through bank and non-bankaffiliates of Citigroup. Not all products and services are provided by all affiliates or are available at all locations. In the U.S., brokerage products and services are provided byCitigroup Global Markets Inc. (CGMI), member SIPC. Accounts carried by Pershing LLC, member FINRA, NYSE, SIPC. CGMI and Citibank, N.A. are affiliatedcompanies under the common control of Citigroup. Outside the U.S., brokerage products and services are provided by other Citigroup affiliates. Investment Managementservices (including portfolio management) are available through CGMI, Citibank, N.A. and other affiliated advisory businesses.

In the United Kingdom, Citibank N.A., London branch and Citibank International plc, Canada Square, Canary Wharf, London E14 5LB, are authorized and regulated by theFinancial Services Authority. The contact number for Citibank N.A. London branch and Citibank International plc in the United Kingdom is +44 (0)20 7508 8000. In Jersey,this document is communicated by Citibank N.A., Jersey Branch which has its registered address at PO Box 104, 38 Esplanade, St Helier, Jersey JE4 8QB. Citibank N.A.,Jersey Branch is regulated by the Jersey Financial Services Commission to conduct deposit taking business under the Banking Business (Jersey) Law 1991 and investmentbusiness under the Financial Services (Jersey) Law 1998. Citibank N.A., Jersey Branch is a member of the Depositors Compensation Scheme as set out in the Banking(Depositors Compensation) (Jersey) Regulations 2009. Further details of the scheme are available on request.

Citi, and Citi with the arc design are registered service marks of Citigroup or its affiliates. 2011 Citigroup. All rights reserved.


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THE WEALTH REPORT KNIGHTFRANK.COM CITIPRIVATEBANK.COM

Much has changed since The Wealth

Reportwas first published by Knight

Frank and Citi Private Bank in early2007. Indeed, given the small matterof a global credit crunch and agrowing number of historic politicalevents, how could the world not bea vastly different place?

In some aspects, it undoubtedlyis. Egyptians look forward to afuture without President Mubarak.

Asia is the worlds new economicpowerhouse. Some of the USs mostrenowned banks are no longer

in existence. The UK and otherEuropean countries face some ofthe most stringent government

spending cuts ever seen. The Frenchmay have to retire at 62, not 60.

But, in the midst of this tumult,the resilience shown by the worldsmost exclusive residential propertydestinations remains constant.In some cases, it has even beenenhanced. Our data on page 60

confirms the strength of therecovery in prime property valuesin London and New York. Theperformance in leading Asiancities has been nothing short ofspectacular. Although, as we exploreon page 26, this itself is cause for

new concern.As our wealth distribution map

on page 10 illustrates, wealth is onceagain being created at a remarkably

rapid rate, especially in Asia. Andthe factors that encourage the

wealthy to seek out and buy the verybest property in cities such as Londonhave, if anything, become evenmore important.

Twin themes run throughthis years report. The first is theongoing rise of Asia. The second isthe importance of education. This

is the key driver when buying asecond home for many Asian HNWIs.

On page 41, in one of our exclusiveHNWI interviews, one of Chinasrichest men explains why it is soimportant to him.

This year, we can claim an evenbetter understanding of whatmotivates UHNWIs around the world

when it comes to their attitudestowards wealth and the decisionsthat shape their investments. Theresults of our uniqueAttitudes Surveyare more global than ever before

and reflect the sentiments of almost5,000 UHNWIs worth on averagemore than $100m each.

Property clearly remains closeto their hearts. According to thesurvey, it makes up 35% of theaverage UHNWIs investmentportfolio and is their most importantinvestment after their own business.Other results from the survey arehighlighted throughout the report

and a more detailed synopsis of itsfindings is contained in our newDatabank section.

The Wealth Report continuesto evolve. Apart from the extrainformation in the Databank section,our Prime International Residential

Index on page 26 covers even morelocations this year. There is moreexpert insight from leading propertyand investment advisers at Knight

Frank and Citi Private Bank. And wealso reveal the results of our new

Vineyards Index on page 38.I hope you find The Wealth Report

more interesting and informativethan ever before. If Knight Frankor Citi Private Bank can be of help,please do not hesitate to get in touch.

You can find a full list of contacts onpages 66-67.

This year, wecan claim aneven betterunderstandingof whatmotivatesUHNWIsaround theworld whenit comes to

their attitudestowardswealth and thedecisions thatshape theirinvestments

CONTRIBUTORSANDREW SHIRLEY

Andrew edits TheWealth Reportand is also Knight Franks head of

rural property research. He previouslyworked in the agriculture sector in

Europe, Asia and Africa.

VICKI SHIELVicki is a former journalist and is part ofKnight Franks residential research team.

She delves into the world of vineyards forthis issue of The Wealth Report.

LIAM BAILEYLiam is head of Knight Franks residential

research team and has a special interest in

super-prime property markets around theworld. He is often quoted in the media.

RICHARD COOKSONRichard is Citi Private Banks chief

investment officer. He was TheEconomists Japan correspondent and

founder of its Buttonwood column.

TINA FORDHAMTina is Citi Private Banks senior politicalanalyst. She was a director at political risk

analyst Eurasia and is an associate fellow atChatham House.

RANDALL WILLETTERandall is an expert on the international

art market and is the founder andmanaging director of consultant Fine

Art Wealth Management.

JOSH SPEROJosh is editor of Spearsmagazine and is

also an expert on the rarefied world of theultra-high-net-worth individual community.

STEPHEN WALLStephen is a director of Scorpio

Partnership, which advises a wide rangeof international clients from the wealth

management sector.

WELCOME

ANDREWSHIRLEY

EDITOR


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THE WEALTH REPORT

CONTENTS

HOW THELAND LIESBY ANDREW SHIRLEY

The Knight Frank FarmlandIndex reveals the state of playin agricultural investments

A YEAR OF LIVING

DANGEROUSLYBY TINA FORDHAM

Turbulence across the worldmeans political risks may trap

unwary investors in 2011

BACK TO THEOLD SCHOOL

BY RICHARD COOKSON

Established marketscould be a better bet

for investment thanemerging economies

THE GLOBAL

ADVENTURERJIM ROGERS

Why the wealthy wandererhas headed east

LIQUID GOLD

BY VICKI SHIEL

There are scores ofopportunities for winemaking,as the Knight Frank Vineyard

Index reveals

THE EASTERNANGLOPHILE

MR XU

Why English educationis top of the class

MONITOR PERFORMANCE

TALES OFTHE CITIESBY LIAM BAILEY

New York and London retain

the lead in our global citiesindex but for how long?

A PLACE INTHE WORLD

BY LIAM BAILEY

Knight Franks PrimeInternational Residential

Index reveals thephenomenal growth inAsias luxury markets

Korea could bevery interestingonce North andSouth merge, asthey inevitably willJim Rogers p23

EAST LEADSRICH REVIVAL

BY STEPHEN WALL

Where are the centres ofwealth across the globe?

SIGNPOST

Exclusive insight from leadinglights and trendsetters in the

world of wealth

What the wealthy think abouteverything from property tophilanthropy to private jets

The ultimate guideto the best prime residential

property on Earth

PIRI

WEALTHTALK

Attitudes Survey


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DATA

BY KNIGHT FRANK

The performance of the worldsleading prime residential and

office property markets

KNIGHTFRANK

CITI PRIVATE

BANK

POWER PLAY

BY ANDREW SHIRLEY

Which investments will benefitfrom global change?

THE GOLDEN

EGG RACEBY LIAM BAILEY

We play fantasy finance

ART IN HEAVEN

BY RANDALL WILLETTE

Why buying artwork should bemore business than hobby

APRES LE DELUGE

MODERATIONBY JOSH SPERO

Shrewd investment eclipsesshowy consumption

THE SOCIALCAPITALIST

STEPHEN DAWSON

Smart money for smart causes

PORTFOLIO DATABANK CONTACTS

ATTITUDES SURVEY

BY THE WEALTH REPORT

What the wealthy think abouteverything from global warming

to investing in Africa

VIEW FROM THE TOPBY KNIGHT FRANK AND CITI PRIVATE BANK

Our experts pick their bestproperty investments

Weve a big obligationto demonstrate ourworks social impact

Stephen Dawson p59


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MONITOR

GEOPOLITICALTRENDS ANDLOCATIONSUNDER THEMICROSCOPE

Flash pointsTina Fordham analysesthe key politicalrisks that could affectthe wealthysinvestments in 2011

Old goldRichard Cookson saysinvestors should notturn their backs onestablished markets inthe developed world

Top townsKnight Frank revealsthe locations that reallymatter to the worldswealthy in its GlobalCities Index

Eastern promiseWhy legendary USinvestor Jim Rogershas quit New Yorkfor a new lifein Singapore

12 14 16 23


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MONITORGEOPOLITICAL TRENDS AND LOCATIONS UNDER THE MICROSCOPE

LATINAMERICA

NORTHAMERICA

COLOMBIA

MEXICO

CHILE

ARGENTINA

BRAZIL

USA

ARGENTINA,

CHILE,

BRAZIL,

COLOMBIA,

MEXICO,

CANADA,

UNITEDSTATES,,

TOTAL HNWIWEALTHUS TN

TOTALNUMBER OFBILLIONAIRES

NUMBER OFHNWIs

KEY

GROWTH INHNWI WEALTH

STEPHEN WALLSCORPIO PARTNERSHIP DIRECTOR

Taking the worlds wealthy as one community, the collective

wealth of high-net-worth individuals (HNWIs) shot back

up last year by 22% as investment markets rebounded,confidence returned and opportunities resurfaced. Wealth creates

wealth for those already in the game, the good times were back.

Very few needed to work too hard to see their numbers rise again.Our Wealth Distribution Model confirms that the big story is

the money now sitting in Asia Pacific $11tn. While still thirdbehind North America ($13tn) and Europe ($11tn), it is fast catchingup and contains two of the worlds four largest wealth markets

Japan ($4tn) and China ($2tn). Bar a huge economic crisis nobody ispredicting, it will snatch second spot from Europe by the end of the

year. North America and the world lead is in its sights.

The market to watch in the Asia-Pacific region is China. Onekey metric is the huge rise in billionaires up 140% over the

year. According to Forbes, China was the 35th ranked country bynumber of billionaires in 2005. By 2010, it was second.

China may eclipse the US in billionaire numbers before AsiaPacific overtakes North America. That growth may be strengthened

by the range of wealth sources driving economic growth. China

will see more entering the billionaires club, backed by a steadierpool of money that is less at risk from dramatic gains and falls thanthat in Russia, for example, with its volatile commodity markets.

Other markets arent out of the global game, however, with more

to the wealth story than just Asia Pacific. North America remainscentre stage, but there is wealth to be made in Brazil, Australia, theGulf states and, boring though it may be, old Europe.

EAST LEADSRICH REVIVAL

The data is based on Scorpio Partnerships proprietary Wealth Distribution Model. This model combinesmacro-economic and micro-economic data to estimate the true spread of wealth across differentcountries. The distribution data is based on parametric distributions of wealth, and builds in particular onthe work of Vilfredo Pareto and subsequent academic developments in the fields of both economics andstatistics. Parameterisation of the wealth distribution is validated against a number of statistical sources,including data from the IMF, UN, national household surveys, national balance sheets and rich lists. Growthfigures are measured in both real terms and local currencies in order to allow for adjustment for inflationand exchange rate fluctuations. Scorpio Partnership is an international business consultancy firm to thewealth management industry. www.scorpiopartnership.com

THE HUGE INCREASE IN CHINESEBILLIONAIRES IS LEADING A NEWRISE IN THE WORLDS WEALTHY

CANADA


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EUROPE MIDDLE EASTAFRICA

INDONESIA

SINGAPORE

AUSTRALIA

JAPAN

CHINA

TAIWAN

HONGKONG

SOUTHKOREA

ISRAEL

SOUTH AFRICA

INDIA

SAUDIARABIA

UNITED ARAB EMIRATES

ASIAPACIFIC

IRELAND

PORTUGAL

SWITZERLAND

FRANCE

SPAIN

ITALY

GERMANY

RUSSIA

UK

ISRAEL, INDIA

,

RUSSIA,

CHINA,

JAPAN,,

SINGAPORE,

INDONESIA,

AUSTRALIA,

HONG KONG,

TAIWAN,

SAUDIARABIA,

UNITEDARABEMIRATES,

ITALY,

IRELAND,

SPAIN,

PORTUGAL,

SWEDEN,

FRANCE,

GERMANY,

UNITEDKINGDOM,

SWITZERLAND,

SOUTHAFRICA,

SOUTHKOREA,

SWEDEN


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A YEAR OF LIVINGDANGEROUSLY HAS ALREADY WITNESSED SOME HISTORICAL POLITICAL

EVENTS. CITI PRIVATE BANKS TINA FORDHAM EXPLAINS WHY WESHOULD GET READY FOR MORE TURBULENCE

the Middle East and North Africa (MENA) will almost

certainly continue.According toAttitudes Surveydata, investor concernabout the state of the global economy and globalpolitical instability increased compared to last year,across regions. Similarly, the World Economic ForumsGlobal Agenda Council identified the worlds shifting

balance of power as the single most important trenddefining the next 12-18 months. These surveys weretaken before events in Tunisia triggered a seriesof political protests; such sentiment is likely to bestronger now.

As the post-global-financial-crisis balance between

government, markets and society recalibrates, politicaland social factors will lag economic and financialindicators. At the core are a handful of cross-cutting

themes: anti-establishment sentiment, sometimesleading to new political movements; growingsocial tensions; the influence of new technology;the globalisation of public expectations; and risingcommodity prices, especially food.

How can investors adapt to this complex, fast-moving political environment? One way is to ensuretheir investments are politically diversified.

POLITICAL SIGNPOSTSFew major elections are scheduled for 2011, a welcome respite in the midst of continuing uncertainty. But political volatility in maturedemocracies will be inflamed by budget and debt limit disputes in the US and austerity and sovereign debt concerns in the EU. Asausterity bites, early elections could be triggered in EU member states such as Spain, Portugal and Italy. Some contests in emergingmarkets could prompt spikes in violence or worse, conflict relapse.

NEWU

SCONGRESSSEATED

IRISHPARLIAMENTARY

ELECTIONS

EUSUMMIT

NIGERIANELECTIONS

TURKISHPARLIAMENTARY

ELECTIONS

NEWE

CBHEADAPPOINTED

GREEKPARLIAMENTARYELECTIONS

EUSUMMIT

EUCOUNCILHEADSOFSTATE

USBUDGETPRESENTEDTO

CONGRESSBYOBAMA

REDEMPTIONSDUE,

BNPORTUGUESEDEBT,

BNSPANISHDEBT

JANUARY APRIL MAY JUNE SEPTEMBER OCTOBERJULY AUGUSTMARCHFEBRUARY

Late last year, we identified 2011 as the Year of

Living Dangerously. We believed increasing socialand political upheaval and intensifying sovereigndebt dynamics would converge, testing the strainedpolitical capital of world leaders.

Events since then have strengthened our view. InJanuary, a US congresswoman was shot, changing thedynamics of the countrys highly polarised politicaldiscourse. A middle-class revolution then removed alongstanding leader from power in Tunisia, followedquickly by Egypt. These developments highlight thepotential for rapid political change and perhapssignal the dawn of a new political era.

The year 2011 will feature a number of criticalsignposts for investors. In the European Union,regional and national elections from Ireland to

Germany will determine the trajectory of the euro-zones political drama, while fierce partisan tensions

will dominate US budget negotiations, and possiblytrigger another government shutdown. A meeting

between the US and China will set the agenda for theworlds most powerful relationship. Nigerians willvote amidst heightened sectarian tensions and morevolatile global oil markets. The political unrest in

For moreAttitudes Survey

results, and to find outwhich global locations

should be on investorsradars, see Databank

on p60

FEARS FOR THE FUTURE

GLOBAL POLITICALINSTABILITY

STATE OF THEGLOBAL ECONOMY

UHNWIs MORE CONCERNED

UHNWIs MORE CONCERNED


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Tina Fordham is Citi Private Bankssenior political analyst and hasmore than a decades experiencein international policy analysis andpolitical risk assessment. Before

joining Citigroup in 2003, she wasdirector of global political risk atthe international consultancyEurasia Group. She is an associatefellow at Chatham House andchair of its Central and EasternEurope task force.

TINAFORDHAM

CITI PRIVATE BANKSSENIOR POLITICAL

ANALYST

0-

RISING FOOD PRICESFood prices can be a trigger forpopular uprisings. At the end oflast year, food price inflation wasrunning at 25%. Harvests havebeen hit by bad weather, and

some crops have also becomesubstitutes for energy in the

form of biofuels.

WAR TERRORISMA major war could set back

the global economic recovery,especially if it were to disrupt

global trade. The risk ofconflict relapse increases

during times of falling livingstandards. Meanwhile the threat

of terrorism continuesa decade onfrom 9/11.

NUCLEARPROLIFERATION

Curtailing the spread of nuclearweapons has been a key priority

for foreign policy for theObama administration, which

sponsored a major internationalgathering on the topic last year.

Yet the pursuit of nuclear

power by rogue statescontinues. This presentsa largely hidden and yet

powerful and potentially lethalrisk at a time when there is

a reduced will and means totackle global problems.

CYBER WARFAREThe advent of cyber warfare

heralds a new era of risk as wellas new methods for combatingit. The Stuxnet virus is thoughtto have eliminated as much asa fifth of Irans nuclear capacity

and slowed its suspected nuclearprogramme by years.

PROTESTS DEMONSTRATIONS

There is increasing evidenceof rising social tensions

and political violence, butthe triggers vary. Austerity

measures in many Europeancountries could prompt larger-

scale protests. Violence canalso be a by-product of greater

political polarisation.

CLIMATE CHANGEChanging weather patterns orone-off environmental eventssuch as floods or drought can

put crop production and humanpopulations at risk, especially in

the developing world.

RADICAL POLITICSNew political movements havesprung from the global financial

crisis: the Tea Party in the USand a host of ultra-rightwing

parties in central Europe.

Previously, political risk analysis focused onassessing perceived higher risks in less transparentemerging market countries, mainly for developed

world investors.Since the global financial crisis, the tables

have turned. Political risk is evident in both thedeveloped world as the role of the state has

expanded and in emerging markets, whereevents in MENA have exploded the myth ofpolitical stability. Investors now need to follownational and even regional eurozone elections,much as they used to track elections in Brazilor Russia. In MENA, initial suggestions that

Tunisias Jasmine Revolution would be an outlierwere proved wrong. Instead, it has provideda remarkable demonstration effect for thephenomenon of people power, reversing decades

of political apathy.The uprisings in MENA are a reminder thateconomic growth doesnt necessarily ensurepolitical stability, especially where gains are overlyconcentrated. Rising food prices one triggerfor the recent unrest remain a risk factor thatcould see a return to the food riots of 2008. But,typically, it is the middle classes and not the poor

who spearhead revolutions. The same populationgrowth and new middle classes in the emergingmarkets that prompted so much foreign directinvestment and helped power growth could now

bring trade-offs.The MENA unrest is likely to dominate the

2011 political agenda, continuing and possibly

worsening before the region stabilises.For leaders, courage and vision will be key

to tackling these new demands, especially inan era of reduced state resources. For investors,in addition to monitoring political risks moreclosely, diversification to reduce their exposure tosometimes sudden political upheaval may bein order.

ARGENTINEPRESIDENTIAL

PARLIAMENTARYELECTIONS

EGYPTIANPRESIDENTIALELECTIONS

GSUMMIT

THAIPARLIAMENTARYELECTIONS

RUSSIANPARLIAMENTARYELECTIONS

NOVEMBER DECEMBER

RISKRUNDOWN

As the post-economic-crisislandscape evolves, new andold risks are intersecting,often in unexpected ways.

Here are the mostimportant


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GEOPOLITICAL TRENDS AND LOCATIONS UNDER THE MICROSCOPE

MONITOR

BACK TOTHE OLDSCHOOL

RICHARD COOKSON SAYS ESTABLISHED LOCATIONSCOULD BE A BETTER BET FOR INVESTMENT

AT THE MOMENT THAN EMERGING MARKETS

We are used, are we not, to crises blowing

over? That is the lesson of these past30 years, from the Latin debt crisis on. At

the 11th hour, helped by aggressive policy action,the winds die down and the waves of

the financial world begin to calm. What of thislatest episode, probably the greatest financialcrisis in history? During the past three years,policymakers have poured huge amounts of oil onthe crashing waters. Developed-world central bankshave cut short rates to their lowest levelin recorded history and where this has beendeemed insufficient, they have simply printedmore money. With the private sector refusingto spend, governments did the job for them

governments the world over have massively

loosened fiscal policy.On the face of it, these policies have worked.

Growth and consumer spending have mostlystarted to pick up. Company profits have soared.

Stock markets have climbed vertiginously sincetheir nadir in March 2009. Spreads on corporate

bonds have almost normalised. Commodity priceshave soared, due in part to growth in the emerging

world that has returned with a vengeance.But for many countries, especially those in the

developed world, this is a crisis delayed, not solved there have been many unintended consequencesthat are starting to hurt. The huge fiscal largessehas left governments the world over with

RICHARD COOKSONCITI PRIVATE BANK GLOBAL CHIEF

INVESTMENT OFFICER


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HOW WEALTH ADVISERS RATE THE CURRENT ECONOMIC POLICIES OF THE COUNTRY WHERE MOST OF THEIR CLIENTS ARE BASED

Africa Europe India Middle North Russia Latin East Asia Global East America & CIS America

33 57 50 38 28 50 10 38 39

67 17 19 23 48 50 50 35 33

0 0 31 23 4 0 40 27 18

0 9 0 8 16 0 10 16 11

0 13 0 15 16 0 0 0 7

0 13 0 0 4 0 0 0 3

They offer a viable and long-term solution to the economic issues facing the country at the moment

They may improve the economic situation in the short t erm, but do not provide a long-term solution

They will improve an already good economic performance

They are unlikely to have any meaningful impact

They will hamper the countrys ongoing economic recovery

They will make a bad situation worse

They will make it easier for my cl ients to create wealth

The global economy is more important to their wealth than national economic policy

They will make it harder for my clients to create wealth

They could force my clients t o relocate

They will actively reduce my clients wealth

THE IMPACT WEALTH ADVISERS THINK THESE POLICIES WILL HAVE ON THEIR CLIENTS WEALTH

Africa Europe India Middle North Russia Latin East Asia Global East America & CIS America

33 4 75 50 21 50 45 40 35

33 40 19 14 24 50 18 37 29

0 32 6 21 55 0 36 21 29

33 24 0 0 0 0 0 2 6

0 0 0 14 0 0 0 0 1

GOVERNMENTS BACKED TO HELP ECONOMIES

% of advisers in each region who agreed with the statement

Problems withemerging markets,such as inflation,are starting toappear in theirhitherto near-cloudless skies

huge amounts of debt. Since the over-indebteddeveloped-world private sector wouldnt borrowand spend, governments did the job for them. But

markets have become very nervous about theirability to service these debts in one way or another.

The problems are, of course, most acute in theeurozone, where countries have lost not just anindependent monetary policy, but also the abilityto devalue their way to growth. Policymakers have

been treating what is, essentially, an insolvencyproblem with expensive liquidity support. Thatmight work for a while, but if those hugelyindebted countries arent growing, borrowing

rates that are higher than their nominalgrowth rates will mean that their debts (andworries about them) will continue to mount.

Even those countries that have kept theirmonetary sovereignty are likely to suffer at somepoint, for the simple reason that, when it comes tothe likes of the US and the UK, the private sector particularly households is very likely to carryon deleveraging, because unemployment andhousehold debts are still so high, thus providinga drag on growth. You can see this quite simply bylooking at the continued fall in household credit.

Of course, such countries could export their wayto growth were the emerging world to continueto grow at such a giddy speed. Yet problems are

starting to appear in their hitherto near-cloudlessskies. Inflation is climbing worryingly fast. Muchof this is food-price inflation, but certainly not allof it. The fact is that monetary policy is just tooloose in most parts of the emerging world. Chinais a big concern here, not only because inflation especially house-price inflation is climbing, but

because much of the rest of the emerging worldis, in effect, a proxy China play, thanks to surgingdemand for imports, not least of all, commodities.

In 1999, China accounted for 7% of global demandfor industrial commodities; in 2009, the figure

was 46%.From an investment viewpoint, all this matters

hugely. Investors have been more than a littleenthusiastic about all things emerging-market forthe past couple of years. While this seems sensiblein the long term, given the structural problems inthe developed world, inflation that is getting out ofhand is likely to lead to a short-term reassessment

of the allure of emerging assets. Investors are,we think, likely to turn again to developed-worldassets that they have shunned, especially those inEurope and Japan. You dont need to believe thatsuch countries are about to start motoring to buytheir stock markets; they arent.

All you need to believe is that it is not onlythose countries that have problems andtherefore that the difference in what, in effect,

you pay for growth and value at the momentis extreme. We think it is. According to oursums, implied equity returns for even core

European equities are twice as high as those foremerging equities.

Richard Cookson is the global chief investment officer of Citi Private Bank.He started his career as a bond trader for a Japanese bank before moving to

journalism, including a total of almost 10 years at The Economist, for whichhe spent three years as its Japan correspondent and was, before he left forthe second time, the papers international finance editor and founder of theButtonwood column.




on p60


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TALES OFTHE CITIES

THE DOMINANCE OF WESTERN CITIES ISBEING CHALLENGED BY UP AND COMING

CENTRES IN BRAZIL, RUSSIA, INDIA ANDCHINA, FINDS LIAM BAILEY


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A rise up theranks of globalcities is on thehorizon forMoscow


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THE PRESENT

TheKnight Frank Global CitiesSurveyhas become a well-regarded monitor of city-level

power shifts since it was createdin 2008. As in previous years, our

objective has been to assess keymarkets across the world in termsof their provision of investmentopportunities and their influenceon global business leaders andthe political elite.

This years survey reveals 14cities sliding down the rankingsand 16 moving up. The biggestmovements, unsurprisingly, came

in our Economic Activity category.The ongoing West-to-East shift ineconomic might is highlighted bythe fact that eight of the 13 jumps inthis area were by Asian cities, led byShanghai and Kuala Lumpur.

But the West is not withoutits successes. Munichs rise inthis category points to the newconfidence in Germany its starhas been rising strongly during the

and Australian city living. The risein Londons ranking may raise afew eyebrows. However, arrival atLondons refurbished St Pancrasstation or to Heathrows Terminal

Five show that London has investedin infrastructure in recent years.

Some of the widespread changesin this years Knowledge andInfluence ranking, with 32 out of40 cities changing place, can beattributed to improved datasets

we have been able to rely on thisyear. However, this volatility is alsoan indication of the level of

competition between cities thatare seeking to exert power throughinvestment in knowledge industries.

The overall winners this year area diverse grouping, with Boston,Munich, Milan, Mumbai and Rio de

Janeiro among the biggest climbersin our rankings. At the top of thetable, however, there is no change New York holds the pole it stole fromLondon last year.

Euro crisis. As we confirm on pageeight, with a HNWI populationdouble that of China, German wealthis likely to increasingly influenceregional asset price performance.

When we look at Political Power,we can see a more nuanced versionof the West-to-East narrative. Themajority of risers in this category areclaimed by North America. With SanFrancisco and Toronto leading thecharge, it appears to be those cities

with most appeal to Asian investorsthat are seeing improving fortunes.

Singapores rise in this category

might raise eyebrows. The city-stateis a relative minnow in terms ofits population, military and globaleconomic power its success ininfluencing regional powers is due toits skills of coercion and attraction.

Rises in our Quality of Lifeindicator from Sydney and Zurich

will no doubt be greeted by wearyacceptance from a world longinured to the superiority of Swiss

THE KNIGHT FRANK GLOBAL CITIES INDEX

2011 City Economic Political Quality Knowledge ChangeOverall activity power of life & influence in rankingRank 2010-111 New York 1 2 9 1 02 London 2 5 5 2 03 Paris 4 6 1 4 04 Tokyo 3 7 7 3 05 Brussels 15 3 11 12 +16 Los Angeles 10 16 10 7 -17 Singapore 6 13 18 8 08 Beijing 9 4 22 16 +19 Toronto 17 20 3 11 +110 Berlin 23 12 2 15 -211 Chicago 12 19 15 6 012 Washington DC 31 1 12 10 013 Seoul 8 18 16 14 014 Frankfurt 11 25 4 20 +115 Sydney 14 33 13 9 +116 San Francisco 20 23 14 13 +117 Hong Kong 7 32 27 5 - 318 Shanghai 5 17 29 22 +119 Mexico City 29 10 23 25 +220 Bangkok 18 14 30 24 -221 Moscow 16 31 19 21 +122 Zurich 26 39 6 17 -223 Munich 25 27 8 30 +324 Taipei 13 15 33 31 -125 Sao Paulo 19 21 24 29 -126 Buenos Aires 34 11 26 23 +127 Istanbul 28 9 36 27 -228 Milan 24 29 20 32 +229 Boston 27 38 21 19 +330 Miami 30 22 28 26 -131 Cairo 35 8 35 28 -332 Dubai 22 37 37 18 -133 Kuala Lumpur 21 30 32 34 +134 Tel Aviv 40 26 17 37 -135 Bogota 38 24 31 39 036 Rio de Janeiro 36 35 25 38 +137 New Delhi 39 28 38 33 -138 Mumbai 32 40 34 35 +139 Jakarta 33 34 40 36 -140 Johannesburg 37 36 39 40 0

ECONOMIC ACTIVITY

POLITICAL POWER

QUALITY OF LIFE

City Rank Rank 2010 2011 ChangeNew York 1 1 0London 2 2 0Tokyo 3 3 0Paris 4 4 0Shanghai 7 5 +2Singapore 5 6 -1Hong Kong 6 7 -1Seoul 9 8 +1Beijing 8 9 -1Los Angeles 10 10 0

Washington DC 1 1 0New York 2 2 0Brussels 3 3 0Beijing 4 4 0London 5 5 0Paris 6 6 0Tokyo 7 7 0Cairo 9 8 +1Istanbul 8 9 -1

Mexico City 10 10 0

Paris 1 1 0Berlin 2 2 0Toronto 3 3 0Frankfurt 4 4 0London 6 5 +1Zurich 7 6 +1Tokyo 5 7 -2Munich 8 8 0New York 9 9 0Los Angeles 10 10 0


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THE FUTURE

Despite some improvementsfrom our emerging marketcities particularly in the

Asian behemoths to some, the topof our ranking might look slightly

too European and North Americanin flavour. So what of the future, how

will our list look a decade from now?In ourAttitudes Survey(page 62),

we asked our panel to nominatethe leading cities, in terms of theirimportance to HNWIs both nowand in 2020.

The most reassuring element tonote for New Yorkers and Londoners

is that the two top spots dont lookset to change over the next 10 years,although the current chasm betweenthese two cities and the rest is set toclose rapidly (see table below). Withthe exception of these two, all elselooks set for a total makeover.

Some of the established Asiancentres, such as Singapore, HongKong and Tokyo, appear at risk ofrelative weakening compared to

HOW WE MEASURETHE WORLDIn our attempt to create the most rounded assessment ofthe locations that matter to the global tribe of footloosewealthy and influential HNWIs, we have tweaked andimproved our survey methodology. As with previous years,we have considered much more than each citys shareof world financial flows and economic activity we havebeen convinced of the need to assess political influence,intellectual activity and, critically, liveability. As before,our assessment is divided into four themes, with each cityranked from one (strongest) to 40 (weakest). Aggregaterank determines the final position in the survey.

ECONOMIC ACTIVITY

First, we consider economic activity including economicoutput, income per head, financial and capital market

activity and market share, together with the number ofinternational business headquarters in each city.

POLITICAL POWER

Broader non-economic influence is captured by oursecond measure, which we loosely label political power.Here, we calculate the importance of each city to globalpolitical thought and opinion, identifying where power isheld and influence exercised. Our ranking includes thenumber of HQs for national political organisations andinternational non-governmental organisations, togetherwith the number of embassies and think-tanksin each city.

QUALITY OF LIFE

Finally, we assessed the quality of life offered by each city.The range of issues considered was extensive and includedmeasures of personal and political freedom, censorship,personal security, crime, political stability, health facilities,public services and transport, culture and leisure, climateand the quality of the natural and man-made environment.

KNOWLEDGE INFLUENCE

Next, we consider each citys knowledge base assessing educational status and the number and rankingof educational facilities. We then consider how well eachcity is able to transmit this knowledge by assessing thenumber of national and international media organisationsand news bureaux, and the international market share oflocally based media.

SOURCES INCLUDE

UN, IMF, Foreign Policy Magazine, EIU, Globalizationand World Cities Study Group and Network, AT Kearney,Chicago Council on Global Affairs, The Institute forUrban Strategies at The Mori Memorial Foundation,Y/Zen Group.

Chinas rising stars of Beijing andespecially Shanghai. The biggestfallers seem set to be Geneva, Zurich,

Washington and San Francisco, whileVancouver falls out of our future top

20 entirely.The three biggest winners point

to a rebalancing within the Brazil,Russia, India and China (Bric)grouping, with the main citiesto watch being Mumbai, Moscowand Sao Paulo. They look set for adramatic upswing in their status,

with each expected to climb bybetween six and eight places over the

next decade.

KNOWLEDGE INFLUENCE

THE WORLDSLEADING CITIES IN

YEARS TIMERank2020 City Score Percentage change

in score from 20101 New York 759 -82 London 611 -163 Shanghai 558 +914 Beijing 506 +395 Hong Kong 479 +16 Singapore 438 +47 Mumbai 225 +1188 Tokyo 220 -149 Paris 129 -4610 Moscow 117 +2311 Dubai 113 -712 Sao Paulo 103 +6613 Zurich 93 -3914 Geneva 92 -5515 Washington DC 91 -2916 Berlin 84 -1517 Sydney 72 -2618 Los Angeles 59 -3419 Seoul 52 +73

20 San Francisco 42 -54OurAttitudes Surveyasked which will be the worldsleading cities in 10 years time.

DO YOU AGREE WITHOUR GLOBAL CITIESRANKINGS NOW ANDIN THE FUTURE?HAVE YOUR SAY ATKNIGHTFRANK.COMGLOBALBRIEFING

City Rank Rank2010 2011 ChangeNew York 1 1 0London 2 2 0Tokyo 5 3 +2Paris 4 4 0Hong Kong 3 5 -2Chicago 8 6 +2Los Angeles 6 7 -1Singapore 7 8 -1Sydney 11 9 +2Washington DC 9 10 -1




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CITIES INFOCUS

The WealthReport askedpeople livingand workingin three of thecities going upin our rankingsto describewhy they areso successful

THE BEST THINGABOUT LIVING INZURICH IS

the absurdly benign

location, which I thinkmight surprise manypeople who think of it asa financial centre. It is anoutdoor city with mountainson the doorstep Simon Calder,senior travel editor, The Independent

that in summertime, Iwalk 50m from my office inthe central business districtto swim in the River Limmat Corine Mauch, mayor of Zurich

the city has changed

substantially in the past twodecades due to intelligentlegislation and an influxof global culture. At itsbest, it achieves an almostMediterranean lifestyle,transcending its pragmaticCalvinist roots Markus Schaefer,co-founder of Hosoya Schaefer Architecture

TO BECOME ATRULY GLOBALCITY, ZURICHNEEDS TO

build upwards ratherthan outwards to protectgreen areas Christian Brandle,director, Museum of Design, Zurich

rediscover itsconnectivity. Since thedemise of Swissair, it haslost its place as a globalaviation hub Simon Calder

obsess less about beingsuch a small one Haig Simonian,Financial Timesbureau chief

well, considering itsgrowth, Zurich is alreadyon the path to becominga global city Markus Schaefer

THE BIGGESTOPPORTUNITYFOR ZURICH IS

to respect urbanism

on a landscape scale. If itspopulation were to risesignificantly, it would losemany of its qualities Christian Brandle

to continue benefitingfrom the drift away frominefficient, strike-prone, andfrustrating mega-cities likeLondon and Paris Haig Simonian

that people from all overthe world live here andmake a real contribution

to urban diversity Corine Mauch

to further develop itsstrengths as a knowledgesociety Markus Schaefer

Metropolitan Population*965,000GDP Per Capita (US$ 2010)79,500Economic Activity rank26Political Power rank39Quality of Life rank6Knowledge & Influence rank17

*Source: citymayors.com (2010)

ZURICHQUALITY

OF LIFE

A dip in the RiverLimmat is justa short summerstroll fromZurichs centralbusiness district


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BUENOS AIRESCAN MAXIMISE

ITS GLOBALINFLUENCE BY

participating in moreinternational conferences.Argentina joining the G20was a positive step forward Michael Luongo, freelance journalist and authorof the Frommers Buenos Airesguide

pushing forward itsinvestment opportunities forglobal brands and investorsin the real estate, hotel andinfrastructure sectors RodolfoMilesi, Branding Latin America

promoting its culturalofferings and cuisine Ariel S.Gonzalez Levaggi, executive director, ArgentineCentre of International Studies

THEIMPROVEMENTIN SEOULSECONOMY OVERRECENT YEARS IS

DUE TO its weak currencyallowing strong exports,until it began appreciatingin 2010. Other factorsinclude high demandfor technology Lawrence White, Asia editor, Euromoneymagazine

the strong IT andmanufacturing industrialgrowth, especially in mobile,semiconductor, auto and

shipbuilding sectors Zed Kim,

managing director, Knight Frank South Korea

the steady increasein consumption Dalho Cho, research fellow,Seoul Development Institute

WEALTHY SOUTHAMERICANS VIEW

BUENOS AIRESAS

the best place to networkin the region Rodolfo Milesi

a fun destination famousfor its nightlife, Europeanarchitecture, museums,theatre and film production,which few other SouthAmerican cities can rival Michael Luongo

a good city to live in.Buenos Aires culturalbackground andknowledge base is spreadinternationally Belen Olaiz,research analyst, Citigroup

BUENOS AIRESIS A WORLD

LEADER IN commodity markets, dueto Argentinas agriculturalbounty, namely wheat, soyand other grains, as wellas meat exporting and oilexploration Michael Luongo

the university experience.Universities such asUniversidad de Buenos Aires(UBA) and UniversidadTorcuato Di Tella (UTDT)receive students from all

over Latin America Belen Olaiz,

lifestyle. I have never metanyone who hasnt enjoyedit here Rodolfo Milesi

Metropolitan Population*12,924,000GDP Per Capita (US$ 2010)14,000Economic Activity rank34Political Power rank11Quality of Life rank26Knowledge & Influence rank23

Metropolitan Population*24,472,000GDP Per Capita (US$ 2010)24,200Economic Activity rank8Political Power rank18Quality of Life rank16Knowledge & Influence rank14

THE BIGGESTLONGTERMECONOMIC RISKFOR SEOUL IS

the appreciation ofthe Won Lawrence White

the policies of theUS government Jim Rogers,,investor and author

the first risk is inflation.Second is North Koreasthreat. Third is uncertaintyin real estate Zed Kim

the ageing population.The high rise both inhealthcare costs and

national pension paymentsmay damage the nationsfiscal health Dalho Cho

CHINASECONOMICAND POLITICALINFLUENCE ONSEOUL IS LIKELY

TO grow significantly,notably through its closerelationship with NorthKorea. China is Koreas mostimportant economic tradingpartner, followed by Japanand then the USA Zed Kim

increase, in as much asChina is becoming moreinfluential to everyone, butSeoul is not as reliant onChina as some other Asian

countries Lawrence White

grow, especially whenthe North and South merge,which I envisage will occurwithin five years Jim Rogers (seepage 23 for more from Mr Rogers)

BUENOS AIRESKNOWLEDGE INFLUENCE

SEOULECONOMIC

ACTIVITY


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THEENTREPRENEUR

1SHANGHAI

2HONG KONG

3BEIJING

4NEW YORK

5MUMBAI

6

SINGAPORE7LONDON

8SAO PAULO

9SAN FRANCISCO

10PALO ALTO

THEHEDONIST

1NEW YORK

2HONG KONG

3TOKYO

4

PARIS5

LONDON6

SHANGHAI7

RIO8

BARCELONA9

SYDNEY10

DUBAI

THEROMANTIC

1PARIS

2NEW YORK

3LONDON

4ROME

5TOKYO

6SYDNEY

7SHANGHAI

8HONG KONG

9SAN FRANCISCO

10VANCOUVER

COOL ANDCOOLER

THE KNIGHT FRANK HOT LIST

THE WEALTHYS CHOICE OFLOCATIONS FOR BUSINESS, FUN

AND ROMANCE SPRUNGFEW SURPRISES. SO VICKI SHIELSCOURED THE WORLD TO FIND

SOME NEW LOCATIONS

Best for business? Shanghai. For hedonism? New York. Forromance? Paris. The results of ourAttitudes Surveywere a littlepredictable (see left). The top location in our Hot List, Maputo,

ticks all the boxes (see right).

Sources: The Economist,Bloomberg, World Bank, IMF,

*Ledbury Researchwww.ledburyresearch.com

All location ratings are arbitrary.If you beg to differ then have

your say at www.knightfrank.com/globalbriefing

MAPUTO, MOZAMBIQUEWOULD SUIT: Beach-loving,

risk-hungry investors.Capital of one of Africas best-

performing economies. AverageGDP growth of 8% between 1996

and 2008. Similar expected in2011. Busy port. $1.2bn waterfront

redevelopment with five-starRadisson Blu hotel. Close to the best

beaches on the Indian Ocean.

MACAU, CHINAWOULD SUIT: Gamblers.

Dubbed Las Vegas of the Orient.Worlds largest casino hub. Only

legal gambling city in China. Casinorevenue surged 33% in January.

Luxury footprint more than doubledin 2010 as Cartier, Bvlgari and

Burberry opened stores for wealthyChinese gamblers*. Exclusive

hotels including The Venetian andMGM Grand.

RIO DE JANEIRO, BRAZILWOULD SUIT: Glamour-seeking

sports enthusiasts.Host city for the 2014 World Cupand 2016 Olympics. Development

projects are numerous.Copacabanas Museum of Image

and Sound, designed by New Yorkarchitects Diller Scofidio + Renfro,opening 2011. Income growth of6.2% and employment growth of

3.2% in 2009-10.

BAKU, AZERBAIJANWOULD SUIT: Investors seeking

stake in abundant mineral resources.Azerbaijans profitable trade

relationship with China has seen its

capital prosper. Growing HNWIpopulation. Luxury brands includingBvlgari, Cartier and Gucci opened

stores in 2010*. Iconic Flame Towerscomplex from the Fairmont hotel

group opens this year.

ISTANBUL, TURKEYWOULD SUIT: Culture lovers.

2010 European Capital of Culture.Istancool annual festival of fashion,film, art and literature. Le Meridien

Istanbul Etiler opening this year.Worlds best-performing city

in terms of income (5.5%) andemployment growth (7.3%). Burberryopened three new stores in the city

in 2010*.

TAIPEI, TAIWANWOULD SUIT: Fans of skyscrapers

and high-speed trains.Claimed tallest building, Taipei 101,

until Burj Dubai opened in 2010.Bullet trains cut travel times by 60%

or more. Long-standing tensionwith China easing. 2010 trade

pact described as most significantagreement in 60 years of separation.

GDP forecast to grow 9.3%this year.

SUZHOU, CHINAWOULD SUIT: Wedding

entrepreneurs.Close to Shanghai. Popular with

overseas companies. Possibly mostaffluent city in China. Per-capita

income three times interior cities. Bigsilk producer and hub for weddingdress design, manufacturing and

merchandising. Renowned marketwith 700 wedding-related outlets.

Known as Venice of the East.

ULAN BATOR, MONGOLIAWOULD SUIT: Mining

investors who like the cold.Temperatures can plummet to -50c.Louis Vuitton unexpectedly openeda two-storey shop in 2009*. Massive

mineral reserves. Huge overseasinvestment interest. Predicted

as next Asian Tiger economy orMongolian Wolf. IMF predicts

double-digit annual growth for yearsto come.

ASTANA, KAZAKHSTANWOULD SUIT: Budding

oil magnates.Key central Asia location. Hugeenergy resources. Capital city

since 1997. Reported $30bn spent

since. One of the worlds fastest-growing cities. Designated SpecialEconomic Zone. Growing numberof impressive architectural projects.

Worlds highest tensile structure,Norman Fosters Khan Shatyr

entertainment centre, opened 2010.

DOHA, QATARWOULD SUIT: Football fanslooking for the next Gulf hot spot.Worlds richest country per capita.

Massive energy reserves. 2022World Cup host. Official estimatedinfrastructure spend around $55bn

in next decade, but could reach$86.5bn. 2010 Arab Capital ofCulture. Home to film festivals,

museums and landmark architecture.

New York isthe Big Applethe best locationfor wealthyhedonists?



should be on investors

radars, see Databankon p60


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Jim Rogers likes to goagainst the flow. His

reputation as one ofthe worlds leadingcontrarian investors is well earned.

The Quantum Fund, which heco-founded with George Soros in1970, was one of the first trulyinternational investment funds andgained 4,200% in value during itsfirst 10 years. Christened the Indiana

Jones of Finance by Timemagazine,his adventurous approach to lifeextends beyond his investments: he

has twice driven around the world,once on a motorbike and once by car.

A firm believer in the economic

future of China and certain otherdeveloping Asian nations, MrRogers moved with his family toSingapore in 2007. He is downbeatabout the economic future of the US.

ANDREW SHIRLEY Many peopletalk about the rise of Asia, in

particular China, but few actuallygo there to take advantage of thetrend. Why did you feel that it wasnecessary to move to Singapore?JIM ROGERSThe main reason wasso that my children would grow upspeaking Mandarin and learning

about China and its culture. If itwas just a case of buying and sellingcommodities or stocks, I could dothat just as well from back home.

Moving here was an investment inmy daughters futures.

AS Did travelling around theworld twice create a fundamentalchange in the way you viewed yourinvestment strategy?JR It makes you a better investorif you know the world. Being incountries that are changing helps

you understand the implications ofthose changes.

ASChinas GDP is fast catching up tothe US, but will the regions majorinvestment hubs such as Singapore,Hong Kong and Shanghai ever rivalLondon and New York as the worldsleading cities?JRAbsolutely. We have seen agigantic volume of assets move tothese cities. The statistics are mind-

boggling. The largest creditor nationsare in Asia now. Hong Kong is already

the largest IPO centre in the world.

AS Do you think human-rights

issues, lack of political freedom oreven democracy will hold these cities

back from really leading the world?JR Certainly there are strugglesfor human rights and there will besetbacks along the way, but Chinaand other parts of Asia are openingup more and more, while the US

is starting to close up. Societiesevolve. In the 19th century, the UShad little rule of law, there was lotsof deprivation and you could buyand sell politicians, but the countrysurvived and had a pretty good 20thcentury. But now I dont think you

can say that the US is a freer andfairer society than it was 10 years ago.Its the sort of thing that could bringthe country down.

ASWhat is it about China thatparticularly impresses you as aninvestment opportunity?JRIn my view, China is going to bethe most important country of the21st century. The 19th century wasthe century of the UK and the 20thcentury was the century of the US.Chinas population saves and invests

35% of its income and people workfrom dawn to dusk it has a lot of

things going for it.

ASHow do you view other locationsin the region do any have the samepotential as China in your view? Youhave been quite downbeat aboutIndia, for example. Why is that?JRVietnam looks promising. Koreacould be very interesting once Northand South merge, as they inevitably

will. India is not a real country itssomething that the English

pushed together.

ASHow do you view property as

an investment?JRI am very optimistic aboutfarmland. There are staggeringamounts of untouched potentialfarmland in Brazil, the Ukraineand parts of Eastern Europe. And insome parts of Africa oh my God,

you sit by the road, plant something

and it will start growing. Farmlandin Africa offers untold wealth.

ASWhat has been yourbest investment?JRMy two little girls and teachingthem Mandarin.

ASAnd the worst?JR Ive made plenty of mistakes, Isold oil short just before Saddam

invaded Kuwait, but the worst has tobe my first wife. The divorce cost mea couple of years of my life.

ASWhats your advice to those whowant to become HNWIs?JRBuy low, sell high. Be curious and

be sceptical. And make sure that yourchildren and your grandchildren arefluent in Mandarin.

THE GLOBAL ADVENTUREROUR GLOBAL CITIES INDEX REVEALS THAT EASTERN CENTRES ARE FIGHTING WESTERN

DOMINANCE. LEGENDARY US INVESTOR JIM ROGERS TELLS ANDREW SHIRLEY WHYHE MOVED HIS FAMILY FROM NEW YORK TO SINGAPORE

Korea couldbe veryinterestingonce Northand Southmerge, as theyinevitably will

WWW.JIMROGERS.COM

WEALTHTALK
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PERFORMANCEWEIGHING UP THE WORLDS MOST EXCITING PRIME PROPERTY MARKETS

KNIGHT FRANKS PRIME INTERNATIONAL RESIDENTIAL INDEX PIRI IS THE WORLDSMOST COMPREHENSIVE ANALYSIS OF LUXURY RESIDENTIAL PRICE TRENDS.

ENCOMPASSING MORE THAN LOCATIONS IN COUNTRIES, IT REFLECTSA GROWING NEED TO THINK INTERNATIONALLY, SAYS LIAM BAILEY

A PLACEIN THE

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LIAM BAILEYKNIGHT FRANKS HEAD OF

RESIDENTIAL RESEARCH

performance suggests and our summarycharts overleaf confirm, last year was nota one-way bet for those investing in thesemarkets. Later, we consider the longer-termoutlook for the tax-driven markets, and delveinto two themes that drive luxury marketperformance education and second homes.

While prices rose last year in 37% of themarkets we track, there is no disguising thefact that the global residential market, eventhe luxury segment, is feeling some significantaftershocks from the global financial crisis.

In cities as diverse as Dublin, Chicago, LosAngeles, Hanoi and Abu Dhabi, oversupplyand falling prices underline the readjustmentfor once-booming markets. In Edinburgh,the restructuring of the financial sector and

tightening access to credit are acting to limitsales volumes in the prime market.

Almost a quarter of Citi Private BanksEuropean clients believe that theycould be forced to relocate their

principal residence as a result of nationaleconomic and taxation policies. OurAttitudesSurveyalso reveals that up to 37% are activelyconsidering buying a second or third homein 2011. That is why, when it comes to luxuryresidential property, it is crucial that everyone

involved thinks globally.At first glance, the strongest markets in

2010 were Shanghai, Singapore and Mumbai,

all with strong double-digit growth. Theconcern in these markets, and others in Asia especially Hong Kong is the impact ofthe huge new volume of investment fundsin the market after ongoing globalquantitative easing. Real concerns havedeveloped among the regions governmentsover asset price bubbles. Their response is

considered below.Demand from investors has been

pushed even higher in Asia as a resultof underpriced local currencies,especially when considered againstthe US dollar. Currency has become asignificant issue in determining prime

market performance. While the euro didweaken during 2010, the pound remained soweak for so long it undermined the marketrecovery in several parts of Europe where

the British second-home buyer has stayedaway noticeably in Spain, Portugal and Italy.Conversely, Londons recovery has been aidedto a large extent by the affordability thatsterlings weakness offers international buyers.

Low-tax jurisdictions, which might haveexpected to capitalise on the back of perceivedand actual wealth attacks in the majoreconomies, saw an increase in interest from

buyers. But, as Jersey and Guernseys divergent

A market more dependenton global trends creates increased

risks for investors. It isnt just financialdrivers currency movements, interestrates and wealth shifts that dictate marketperformance. Political and security concerns

are also assuming a more critical relevancefor purchasers. These have occurred mostrecently in the Middle East, but also in Asia Bangkok suffered in 2010 from politicalinstability. This had a dramatic impact on thelevel of foreign investment.

GOVERNMENT CONTROLIn last years Wealth Reportwe predictedthat the trend towards government

micromanagement to cool overheatinghousing markets, which had tentativelystarted in Hong Kong and China, was aboutto go global. It did.

The major Asian markets led the way withhigher stamp duty, tighter rules on mortgageaccessibility, limits on the size of investment

portfolios and strong incentives to increasenew-build housing volumes. In Vietnam,Decree 71 in August last year effectivelystymied off-plan sales to investors, and in

Australia, new rules have bolstered existinglimitations on foreign investment.

EU governments would find it verydifficult, if not impossible, to push throughstringent legislation affecting propertyownership rights. Instead, they have

concentrated on mortgage market reformand, in the case of Finland and Spain, thereduction or elimination of tax benefitsfor owner-occupation.

In other countries, the lingeringafter-effects of the 2008 crash mean thatgovernments are actively considering ways of

boosting the market. Ireland, the US and theUK are prominent examples of markets wheregovernments are struggling to balance theneed for restraint from previously bad lendingpractices with the need to encourage the

banks to lend more money.In much of the Middle East, and most

obviously in Dubai, governments are working

hard to underpin their residential marketswith new investment in infrastructure andemployment opportunities.

OUTLOOK FOR To my mind, while Asia continues to dominatein terms of activity and price performance,the real success stories in 2010 confirm the

advantages of a global brand and a diversityof demand requirements. London, New Yorkand Paris have seen strong demand, andreasonably robust price growth.

Demand for second homes has beenaugmented by employment, education andlifestyle-driven purchases. This has led to

double-digit growth in these markets, despiteongoing national market uncertainty.

To assess the future luxury-home hotspots,we have assembled a world map of global

market demand. Our map, on page 32, showsthe centres of demand for the worlds wealthy.

It has been said in previous editions ofTheWealth Report, but I believe it is worthsaying it again: tried-and-tested markets withsecurity of infrastructure and political andlegal stability will outperform in the long-term. No market is immune from a crisis, butthese tend to have a depth of demand thatcreates a true liquid investment.

PAGE THE KNIGHT FRANKPIRI INDEX

PAGE THE BIG THEMESAFFECTINGPRIME PROPERTYPERFORMANCE

PAGE LUXURY MARKET

PRICING IN DETAILPAGE WHERE THE WEALTHYARE BUYING




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1 Shanghai China +212 Mumbai India +203 Singapore Singapore +184 Helsinki Finland +185 Bangalore India +176 Paris France +157 Hong Kong China +158 New York US +139 Manila Philippines +1210 Guernsey Channel Islands +1111 Munich* Germany +1112 London UK +1013 Gaborone Botswana +1014 Beijing China +1015 Bali* Indonesia +1016 Marrakesh Morocco +1017 Auckland New Zealand +1018 Geneva* Switzerland +919 Panama City Panama +820 Berlin* Germany +721 Ho Chi Minh City Vietnam +722 Kuala Lumpur Malaysia +723 Home Counties UK +524 Jakarta Indonesia +325 Bangkok Thailand +326 Brussels Belgium +227 Hanoi Vietnam +228 San Francisco* US +229 Christchurch New Zealand +130 Moscow Russia +131 Rome Italy +132 Lausanne* Switzerland 033 Black Sea coast Bulgaria 034 Phnom Penh Cambodia 035 Dubrovnik Croatia 036 Cyprus Cyprus 037 Dominican Republic Dominican Republic 038 Cap Ferrat France 039 St Tropez France 040 Cannes France 041 Chamonix France 042 Val dIsere France 043 Megeve France 044 Courchevel France 045 Meribel France 046 Provence France 047 Grimaud France 0

48 Gascony France 049 Lake Como Italy 050 Amalfi Coast* Italy 051 Monaco Monaco 052 St Kitts and Nevis St Kitts and Nevis 053 Phuket* Thailand 054 Alderney Channel Islands 055 Lusaka Zambia 056 Zurich* Switzerland 057 St Petersburg Russia -158 Abu Dhabi UAE -259 Chicago US -260 Los Angeles* US -461 Marbella Spain -462 Edinburgh UK -463 Barbados Barbados -564 British Virgin Islands British Virgin Islands -565 Dordogne France -566 Valbonne France -567 Cortina Italy -568 Tuscany Italy -569 Venice Italy -570 Florence Italy -5

71 Sardinia Italy -572 Mustique Mustique -573 Central Algarve Portugal -574 Madrid* Spain -575 Sydney Australia -576 Kiev Ukraine -577 Umbria Italy -678 Cayman Islands Cayman Islands -879 Western Algarve Portugal -1080 South-west Mallorca Spain -1081 Ibiza Spain -1082 Dubai UAE -1083 Jersey Channel Islands -1084 Frankfurt* Germany -1985 Dublin Ireland -25

PRICE CHANGE

PRIME MARKET PRICE CHANGE

WORLD REGIONS MARKET TYPES

SOUTHAMERICA

..

CARIBBEAN

.. CITY.

.

SUN

..

SKI

..

TAX

..

ASIA

..

NORTHAMERICA

..

AFRICA

..

MIDDLEEAST

..

EUROPE

..

June to December 2010 % Year to December 2010 %

MUMBAI 2 SINGAPORE 3

All Piri data Knight Frank except: Alderney, Mitchells and Partner Ltd. Aspen, BJ Adams and Company. Black Sea Coast, Black SeaInvestment Trust. Chicago, Baird and Warner. Cyprus, Cybarco. Dubrovnik, Sanevis LLC. Guernsey, Swoffers. Helsinki, Orava Funds(Oikotie Orava Index). Jersey, Le Gallais Estates. Marbella, Diana Morales Properties. Marrakesh & Manila, Kingdom Hotels Investment.New York, Prudential Douglas Elliman in conjunction with Mill er Samuel. Orlando, Tavistock Group. Tokyo, Colliers Halifax. Ulan Bator,Asia Pacific Investment Partners. Vancouver, Sothebys International Realty Canada. Zurich and Geneva, Wuest & Partner.

SHANGHAI 1

*Munich, Berlin, Frankfurt % changes based on Q2 2010 data.Bali % change based on vacant land and completed villas only, not apartments.

Geneva, San Francisco, Zurich, Lausanne, Los Angeles % changesbased on Q3 2010 data.

Amalfi Coast limited data available due to largely private sales.Madrid % change based on asking prices given t he lack of public

information regarding closing prices.Phuket new developments only.


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EXPERT VIEWSECOND HOMES

Demand for second homes bywealthy buyers has been a centraldriver of residential price growthin European, Caribbean, andNorth American sun- and snow-beltsover the past two decades. KnightFrank estimates that more than

80% of all global second-homeproperties are found in these locations.However, with rapid growth inwealth and property investment inAsia, are we set to see the worldsmost populous continent takeover as the luxury second-homehotspot?

EXPECT A GLOBALREBALANCINGMatthew Georgeson,head of sales at Elite Havens, Bali

There is no doubt that the Asian second-

home market is smaller and, in some ways,almost embryonic when compared tothe highly established European and USmarket hotspots.

Outside of Bali and Phuket, there arefew significant markets in Asia thatcompare to the likes of Florida, the CotedAzur, Tuscany, Barbados or Londonas second-home destinations for the

worlds wealthy.That said, the situation is changing very

quickly. There is rapid growth in the numberof new locations of interest to the wealthysecond-home buyer.

Vietnam, has seen buyers from Europeand the US looking to buy before the marketmatures. Cambodia is a new market butis again seeing very strong interest fromadventurous Asian and European buyers.

In China, Hainan Island has becomerapidly established as a key second-homemarket although it tends to be dominated byChinese buyers with few other nationalities in

the market. The example of the Japanese skiresort of Niseko, points to the future of Asiansecond-home markets, where the addition ofexcellent infrastructure, lifestyle amenitiesand high build-quality is attracting buyersfrom Australia, New Zealand and China, as

well as generating very high prices.However, to experience the most

interesting trends in the second-home marketin Asia we really need to look to Bali. No other

location in Asia has developed such a globalspread of demand.

Top-end villas in Bali now command$10m and above an indication of how the

broader Asian second-home market willdevelop. Some markets, especially in China,

will remain domestic in appeal; other luxurysecond-home hubs will be globally attractive

and will compete head-to-head with the moreestablished US and European destinations.

ASIAN BUYERS WILLLOOK ABROADRohit Talwar, global futurist and thefounder and CEO of Fast Future ResearchAs Asias economic miracle develops, thereare some trends that we can be confident willdevelop along the lines already establishedin the West. For example, the desire for Asias

new middle class to buy a house, own a car,eat out and take foreign holidays is a given.

It is when affluence turns into seriouswealth that significant differences inapproaches between one part of the worldand another become apparent. It is still rare,for example, for wealthy Asians to buy second

homes in their domestic markets.Why the difference? Asians have a thirst

for travel and for foreign investment, whichencourages wealthy purchasers to look to

Europe, North America or the Middle East.The certainty regarding property titles and thehigh regard for property rights in countriessuch as Canada, the UK, Australia and NewZealand are also a significant draw.

That said, it appears that investment,rather than lifestyle, is driving most propertypurchases by wealthy Asian buyers inSingapore, Kuala Lumpur, Goa, Malaysiaand Thailand.


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EDUCATION IS BECOMINGA GLOBAL SERVICEMatthew Farthing,headmaster of Harrow BeijingSince we opened Harrow Beijing in 2005,

we have noted how important it is to havea school located close to the villa areas that arepopular with more affluent and internationalcommunities. The impact of schools on the

desirability and house rental or purchasecosts of this admittedly already rather popularneighbourhood has been significant. Therehas been a growing demand from parents tosecure property near to the school.

The fact that schools can have a positiveimpact on demand for property is being taken

very seriously in several locations acrossAsia and the Middle East. In these examples,developers are trying to secure partnerships

EXPERT VIEWEDUCATION

In 2010, almost 63% of all new-buildflats in central London were sold tointernational buyers. After investment,the single biggest driver of demandfor these buyers was the desire fromparents to provide accommodation forexpat students during their studies.

Top-tier universities are helping toshape residential market demand,and with elite schools acting to pullin requirements for luxury housingin cities across the US, the UK, NewZealand and Australia, education hasbecome one of the most significantforces driving property performance.

with UK and US international schools to act asneighbourhood schools, driving demand andproperty values. The development of high-quality international schools in China andacross the emerging markets is a trend thathas a long way to run.

International schools are able to offerplaces only to non-residents of the country

in which they are located. So the presence ofa growing number of international schoolsin China does not stem the flow of wealthy

Chinese pupils to Europe or the US.The quality of education in China and the

rest of Asia is improving at a rapid pace and,on several measures, compares very favourably

with the best on offer in the West. But myfeeling is that despite this rapid growth insupply in Asia, there will not be a weakeningin demand for the home schools in the UK or

US. Growth in global wealth should ensuredemand for the best institutions globally.

INTERNATIONALSCHOOLING IS PARTOF A BIGGER TRENDRupert Hoogewerf,

publisher of the Hurun ReportThe Chinese entrepreneurial classes areincreasingly looking to secure an overseaseducation for their children (see our

interview with billionaire Mr Xu on page41). It used to be that a postgraduate degree

would be an acceptable level of internationalexposure. Now, children of dollar millionaires

will be sent overseas from the age of 16 to UKsixth forms or US high schools. This will befollowed by an undergraduate degree. Those

worth more than $10m now have a growingtendency to send their children away to schoolat 11.

In terms of where the children go, theestablished view used to be safe, traditionalEngland for girls and the competitive anddriven US for boys. Now the divide is more

based on age England for schooling and theUS for university.

In terms of property takeover, this demandfor schooling has a huge impact. If you send

your 11-year-old to school in, say, London orBoston, and potentially on to university, youremaking a decade-long investment there. The

purchase of a house nearby for holidays andthe requisite bimonthly mothers visit is anatural step. As a long-term investment, it alsomakes sense for the purchaser.

At university level, a property for childrento live in is an obvious step to take and a

very popular investment option. Anecdotalevidence indicates that the condition of

property markets can be an influencing factorwhen universities are being assessed.

So where will the next locations be thatthis potent education and property mix willhit? While the UK and the US are already wayahead, Canada, Australia, New Zealand,Hong Kong and Singapore, and even France

and Switzerland, are rising in popularity.With China investing heavily in

domestic education facilities and with moreinternational education expertise coming into

the country, one could say this educationalexodus will be reversed in time. There is onegreat reason why I think this will not happen.

Education is only part of the appeal ofthe international route. The Chinese havean almost universal desire to become globalcitizens, which requires a foreign passportand dual nationality. Sending your children toschool in another country and adding inwardinvestment help hugely in securing this status.

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LOW TAX JURISDICTIONSARE SET TO BOOMCharles Douglas, Charles DouglasSolicitors, London

There is such a high level of admittedly

understandable media animosity to theconcept of a low-tax jurisdiction (LTJ), that

we often ignore the question of whetherthey have anything positive to offer the

global economy.To my mind, the answer to that question

is undoubtedly yes. At a macro level, LTJsfacilitate very easy methods for cross-border

business. They provide a degree of privacy,rather than secrecy, that is welcomed bymany businesses, and which is hugely

beneficial to businesses undertakingcomplex and protracted negotiationsor restructuring.

EXPERT VIEWTAXATION

Rising wealth taxes in the UK andEurope have led to reports of fleeingfinanciers opting for a lower tax bill inSwitzerland, Monaco or the ChannelIslands. The media thinks this wealthflight will lead to a depression inproperty values in London, Frankfurt

and Paris. Certainly, a surge in pricesin the low-tax destinations pointsto the close link between taxationof the wealthy and prime propertyperformance. With governmentspiling pressure on tax havens, areproperty markets in these and otherlow-tax locations safe long term?

At the individual level, of course, they offerlower taxation to residents and investors. But,more importantly, for lots of people who havea very international lifestyle, with businessand property interests across the globe, theyoffer a degree of certainty and permit arational way of conducting ones tax affairs.In addition, while not generally recognised,

the majority of investors and retirees acrossthe world have part of their investments heldin an LTJ.

Ironically, the pressure from the biggereconomies for greater transparency haspushed LTJs further into the mainstream ofeconomic activity and they have become morerelevant to more people. We have seena growing globalisation of activity in LTJs, withnew clients from emerging markets findingthat the services offered fit their requirements

very well. This is particularly so in the contextof the increasing volatility of formerly stableand sound economies. For example, there has

been a noticeable growth in South Americaninterest in New Zealand as a favoured centreand an increase in interest from India inthe Isle of Man, the Channel Islands and

Mauritius. The outlook for LTJs as destinationsfor, and administrative centres of, wealth ismore than safe.

TAX HAVENS MUST PLAYBY THE RULESJeffrey Owens, director of the Centre forTax Policy and Administration, OECDIf LTJs existed purely to siphon tax revenuesaway from the larger economies, then they

would have no future.The reality is that, over the past two

decades, leading LTJs have shifted theiractivities far beyond what is now a rather

old-fashioned view of their role as centres offinancial secrecy and tax avoidance.

LTJs are succeeding and prospering becausethey have specialised in the provision of niche,complex and high-value-added financial andprofessional services.

Our remit at the OECD is to push LTJs torecognise the concerns of the members of our

Global Forum and to encourage the adoptionof new internationally agreed tax standards.

This is a powerful process; behind the forum

stands the G20, which is committed toensuring that LTJs comply with tax standards.

LTJs have the potential to continue tooffer a valuable range of services toindividuals and businesses, and theirrelevance to the global economy is arguablyhigher now than for some time. However,significant changes to taxation are occurring

at a global level which, over the long term,could impact on the attractions of the LTJ,especially for residency.

Despite a recent tightening in response tothe global recession and unparalleled levelsof public debt, the direction of travel formost Western economies has been towards

a reduction in direct taxes and an increasein indirect taxation. As an example, 30 yearsago, average taxation on corporate profitsin developed economies was 50% now it is

26%. For taxes on personal income, the typicalhigher rate 30 years ago was 70% now it israrely higher than 40%.

Our view is that this broad shift intaxation, away from personal income andcorporate profit and towards consumptionis to be welcomed, and will contribute toan ongoing reduction of the pressure onindividuals and businesses to seeka traditional tax haven option.


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NORTH AMERICA LATIN AMERICA EUROPE RUSSIA CIS France 17 United States 48 United Kingdom 28 France Mexico 12 Spain 18 France 24 United Kingdom United Kingdom 9 France 13 United States 18 Italy United States 8 United Kingdom 8 Switzerland 12 Monaco Italy 7 Canada 3 Spain 9Canada 7 Argentina 3 Monaco 4Costa Rica 6 Switzerland 2 United Arab Emirates 2Hong Kong 4 Bahamas 2 Italy 1New Zealand 4 Panama 2 Thailand 1Bahamas 4 Guernsey 1Bermuda 4 Barbados 1Australia 3Ireland 2China 2Nicaragua 2Panama 1St Kitts and Nevis 1Brazil 1Belgium 1Spain 1Monaco 1Argentina 1Virgin Islands 1St Lucia 1Malta 1Jamaica 1Chile 1

NORTH AMERICA Canada 10Switzerland 9United Kingdom 8France 7Mexico 6New Zealand 6Cayman Islands 6

Bermuda 5Bahamas 5China 5Australia 5Italy 5Barbados 3 EUROPE United States 3 Switzerland 39Hong Kong 3 United Kingdom 12Ireland 2 Monaco 9Chile 2 United States 8Germany 2 Singapore 4Jersey 1 Hong Kong 4Costa Rica 1 LATIN AMERICA France 3Macao 1 United States 47 Bahamas 3Isle Of Man 1 Spain 15 Belgium 3Antigua & Barbuda 1 Canada 12 Guernsey 3 RUSSIA CIS Monaco 1 United Kingdom 8 Jersey 3 Monaco Spain 1 France 5 India 3 France Austria 1 Portugal 5 Canada 2 Switzerland Argentina 1 Switzerland 3 United Arab Emirates 2 Italy Finland 1 Panama 3 Spain 1 United Kingdom Anguilla 1 Colombia 2 Bulgaria 1 Spain

RANK LOCATION COUNTRY USSQ M1 Monaco Monaco 65,6002 London UK 56,3003 Cap Ferrat France 54,6004 St Tropez France 40,8005 Paris France 40,5006 Courchevel France 38,8007 Cannes France 31,9008 Tokyo Japan 28,3009 Hong Kong China 27,30010 Singapore Singapore 27,10011 Cyprus Cyprus 25,10012 Sardinia Italy 24,00013 Guernsey Channel Islands 23,90014 Geneva Switzerland 23,70015 Aspen US 22,900

16 Moscow Russia 22,80017 New York US 22,60018 Cortina Italy 21,60019 Mustique Mustique 21,50020 Meribel France 20,00021 St Petersburg Russia 18,60022 Rome Italy 18,20023 Shanghai China 17,70024 Megeve France 17,50025 Mumbai India 17,10026 Salcombe UK 16,40027 Beijing China 16,00028 Helsinki Finland 15,50029 Jersey Channel Islands 14,40030 Lake Como Italy 13,70031 Florence Italy 13,70032 Venice Italy 12,50033 South-west Mallorca Spain 12,50034 Sydney Australia 11,50035 Chamonix France 11,40036 Madrid Spain 10,50037 Barbados Barbados 10,20038 Tuscany Italy 9,600

39 Valbonne France 9,10040 Cayman Islands Cayman Islands 9,00041 British Virgin Islands British Virgin Islands 8,40042 Edinburgh UK 8,20043 Prague Czech Republic 8,00044 Dubrovnik Croatia 6,40045 Provence France 5,90046 Central Algarve Portugal 5,70047 Ibiza Spain 5,70048 Kuala Lumpur Malaysia 5,00049 Dordogne France 4,90050 Western Algarve Portugal 4,90051 Ho Chi Minh City Vietnam 4,80052 Bangalore India 4,30053 Christchurch New Zealand 4,20054 Hanoi Vietnam 4,10055 Gascony France 4,00056 Umbria Italy 3,80057 Jakarta Indonesia 2,80058 Ulan Bator Mongolia 2,30059 Phnom Penh Cambodia 2,10060 Gaborone Botswana 1,300

CHANGINGCOUNTRY OFRESIDENCE

SECONDHOMEPURCHASES

LUXURY MARKET PRICING

Mona

co

15

Lond

on

18

Courche

vel

26

NewY

ork

44

Mumb

ai

58

Venic

e

80

Barba

dos

98

Dubro

vnik

156

Kual

a

Lumpur

200

WHAT M BUYSSQ M

WHERE THE WEALTHY WANT TO BUY AND MOVE TOThe network of international prime property sales is becoming increasingly complex.

Our Attitudes Survey asked wealth advisers where their clients were considering buyinga second home or relocating to permanently. Our map reflects the activity.

Where the wealthyfrom different partsof the world buysecond homes

Where the wealthy

from different partsof the world wantto relocate theirprincipal residence


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MIDDLE EAST AFRICA INDIA EAST ASIA United Kingdom 43 United Kingdom 50 United Kingdom 47 United States 19France 18 United States 33 Singapore 23 Singapore 16United States 15 France 8 United States 20 China 14Lebanon 10 South Africa 8 United Arab Emirates 11 Canada 13Switzerland 8 United Kingdom 12Morocco 3 Australia 11Spain 2 Hong Kong 7 Japan 4 Taiwan 3 France 1 Switzerland 1 Malaysia 1

EAST ASIA Singapore 22 Canada 17MIDDLE EAST Australia 17United Kingdom 40 China 14Lebanon 18 INDIA United States 11United States 13 AFRICA Singapore 37 Hong Kong 9United Arab Emirates 8 United Kingdom 25 United Kingdom 27 United Kingdom 3Switzerland 7 United Arab Emirates 25 United Arab Emirates 19 Switzerland 2Belize 5 United States 17 United States 10 France 1France 3 Singapore 17

2011wealth Report Knight Frank

Documents

Transcript of 2011wealth Report Knight Frank