Maltese Real Estate an ‘Opportunity Gateway’ for Ultra Rich
According to the findings of Wealth-X and Malta Sotheby’s International Realty , Malta is home to 35 Ultra-High-Net-Worth (UHNW) individuals worth around €145bn and two foreign billionaires.
Published last week, the report reveals that 77% of UHNW foreigners who have acquired a residency permit in Malta are self-made. One of Malta’s billionaire residents is Irish-born Denis O’Brien who owns Communicorp, a media holding company operating across Europe and he is listed among the World’s Top 200 Billionaires in 2015 .
To qualify as an UHNW individual, investable assets of at least €27bn are the benchmark, excluding personal assets and property such as a primary residence, collectibles and consumer durables. In February 2015, Malta Sotheby’s International announced its partnership with Wealth-X to provide valuable insights into today’s luxury real estate market and the buying behaviour of the ultra-wealthy consumer.
Malta is among the world’s smallest nations, with a rich history and culture that has been a strong pull for UHNW residents for many years. The country boasts a warm subtropical climate, stunning cliff views of the Mediterranean and numerous UNESCO world heritage sites.
Malta is a rich tapestry of cultures and traditions
Formed by its many historical rulers and influences, Malta is a rich tapestry of cultures and traditions, with classical and contemporary homes scattered throughout the island. Several new seafront complexes offer the range of modern luxury amenities while many older homes are prized for their unique architectural detail.
Foreign nationals are allowed to buy one property anywhere in Malta though in specially designated regions they may purchase additional properties. Several new and exclusive penthouse developments and the luxurious resort ‘Three Villages’ located in Sliema on the east coast are particularly attractive to foreign investors
France, Germany and the US are the top countries for foreign UHNW investments in Maltese property where the average listed price for homes over €1m is around €2.5m, while the median price per square metre is around €6,500 in that price range.
Good long term investment opportunities
The report’s findings show that Malta offers good long term investment opportunities. During 2014, market volatility in certain nations, particularly China, has led wealthy property buyers to seek homes in economically and politically stable locations like Malta, as a hedge against market instability at home. The report states that ‘Malta’s citizenship programme enhances the island’s position as an attractive location for investment, especially as the EU is the most significant region of citizen application’.
Global citizenship is becoming an increasingly popular tool for the world’s ultra-wealthy and Malta’s citizenship programme enables foreign nationals to purchase a property anywhere across the island, although more than one property situated within Special Designated Areas (SDAs) can be bought. Most of the islands luxury lifestyle developments are located in prime, highly sought-after locations in the island’s commerce, leisure and activity hubs.
Wealth-X President David Friedman commented: ” Wealth-X is pleased to partner with Sotheby’s International Realty brand for this third luxury real estate report for 2015. This new joint study explores the trend and home-buying motivations of a distinct group of ultra-wealthy individuals in the emerging markets. As their wealth grows, so will their investment fuelled by various motivations, be it to diversify their portfolio or to gain citizenship or residency in a foreign country “.
According to Philip White, president and chief executive officer of Sotheby’s International Realty Affiliates, the joint report provides an understanding of the trends driving buying decisions of the ultra-rich around the world. ” The research reveals trends that go beyond traditional motivations and help guide real estate investments that contribute to long-term wealth “, he said. ” It underscores the important role real estate plays in a larger strategy to build a valuable asset portfolio “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Specialist Property Investment Soars in the UK
As real estate investors seek to diversify within the asset class, specialist property investment has become the next big thing and nowhere more so than the UK.
According to Knight Frank’s recently published Specialist Property, The Core Markets report, investment in alternative British property assets including student accommodation and hotels has become a critical component of investors’ core portfolios.
Darren Yates, partner of Knight Frank’s commercial research said: ” Based on our in-house forecasts, Knight Frank estimates that investment in the core specialist property sectors will break through the £10bn barrier in 2015 “.
The amount of capital being poured into property has done more than drive down yields, according to Knight Frank; the difficulty of securing traditional investments and the drive for diversification has put specialist sectors including automotive, property, healthcare, hotels and student property very much into the spotlight.
As a result of increased demand for specialist property investments, the UK is set to achieve a record year, with transaction volumes likely to reach £12bn by the end of this year. Knight Frank report that the number of deals in the pipeline with completions expected by the end of the year means their original forecast is likely to be exceeded by a significant margin.
In the first six months of the year, transaction volumes for student property reached £3.5bn and are expected to exceed £5bn for the full year. With a shortage of good quality assets, prime yields have been prompted to harden to 4.5%, with increasing pressure on pricing for secondary stock.
The hotel sector has been notably buoyant among the range of specialist property assets, with investments attracting significant attention and equity. Again, this sector is affected by the supply demand imbalance that exists in the market which could potentially lead to further yield compression.
” Specialist property is attractive to many investors and there are a number of common threads across the various sub-sectors, not least the strong alignment with residential, the opportunity to diversify away from traditional property and the occupier-driven nature of the sector. However, the key reason why we are seeing such an exceptional level of investor interest is the structural under-supply of high quality, purpose-built accommodation. This is supported by buoyant demand from increasingly discerning occupiers, ” said Shaun Roy partner of specialist property investment at Knight Frank.
The specialist property market continues to evolve as a segment in its own right, led by fixed income sectors such as hotels, healthcare and retirement accommodation but also encompassing automotive, student property and even private rented sector (PRS) residential accommodation. Nevertheless, fixed income transactions account for a small portion of the total specialist market.
Investor appetite for specialist property is growing in the UK amid an accelerating economic recovery that has broadened out around the country. There is underlying support for specialist investments from a combination of improving occupier demand, easier to access finance, a broader understanding of operators’ businesses and a willingness to take on greater risk.
Knight Frank say it seems inevitable that investors will move further up the risk curve in search of returns, increasing their operational exposure to these markets through turnover-related leases, direct let and management contracts.
As with other emerging property sectors over the years, yields on alternative assets historically start at a high level and harden as investor interest increases and some sectors have become more accessible in the process. As a result of the growth in capital values in recent years, many early entrants to the specialist property market have reaped significant rewards.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Billionaire Soros sells most of Alibaba, reduces oil stocks
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Business Partners
