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TRANSCRIPT
RESIDENTIAL INVESTMENT
A GLOBAL OVERVIEW
Rupert Sebag-Montefiore
Head of Global Residential, Savills
The Big Themes
• Real Estate has increased its position as Store of Wealth
• Residential Investment is focused on Capital growth not on
rental yields
• Management needs to be local and differs between regions
(but in all markets beware gross to net yields)
• Property markets are cyclical and property trading has a timelag
• The current growth cycle started in the Far East and spread West
• Recently there have been falls in the Far East and the cycle has
reached US secondary cities
• Best growth has been in City markets; Resort/Lifestyle markets
have not shown similar growth
Movement of Wealth
Private wealth is moving markets
Source: Wealth X
+18%
+35%
2014
211,275
$29.7 trn
2019
$40 trn
250,000
= 0.004%
$ = 13%
UHNWI
Europe and Asia hold higher proportions of real
estate
City Market Performance
Moving super prime markets
Source: Savills World Research
15 Central Park West, NYC
Ultra prime, London
Southside, Hong Kong
Record deals
Prime to mainstream ratio
Source: Savills World Research
Prime prices in Hong Kong are
10x that of mainstream values
In US cities, the ratio is far lower,
apart from globally-invested New
York
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
Capital valu
e g
row
th
2006-2013 2013-2015 (H1)
City level performance – capital values
Source: Savills World Research
City level performance: 2006-2013
Source: Savills World Research
Singapore 114%
Hong Kong 112% Mumbai
85%
Shanghai 129%
Moscow 53%
Rapid price growth fuelled by emerging markets
Sydney 43%
City level performance: 2006-2013
Source: Savills World Research
San Francisco 11%
London 55%
New York 25%
Paris 28%
Miami -22%
City outperformance in many western markets
City level performance: 2013-H1 2015
Source: Savills World Research
San Francisco 20%
Singapore -7%
Hong Kong 19%
London 10%
New York 13%
Paris -5%
Tokyo 8%
Mumbai 10%
Moscow -29%
Miami 15%
Sydney 47%
Shanghai 2%
Divergence of performance
The turn of leisure and resort property?
Source: Savills World Research
+60%
+7%
2007-2015
100
120
140
160
180
200
220
240
Dec-0
5
Jun-0
6
Dec-0
6
Jun-0
7
Dec-0
7
Jun-0
8
Dec-0
8
Jun-0
9
Dec-0
9
Jun-1
0
Dec-1
0
Jun-1
1
Dec-1
1
Jun-1
2
Dec-1
2
Jun-1
3
Dec-1
3
Jun-1
4
Dec-1
4
Jun-1
5
Ind
ex D
ec 0
5 =
10
0
World City Property World Leisure Property
Lifestyle Markets
Key ‘retreat’ buyer flows shaping European markets
Scandinavia & N Europe
UK
Source: Savills World Research
Key ‘retreat’ buyer flows shaping European markets
Scandinavia & N Europe
Middle East
Russia
China
UK
US
Source: Savills World Research
Typical price - prime 4 bed villa
Source: Savills World Research
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
US
D p
rice
psft
US
D p
rice
USD price USD psft
Forecasts
5 year prognosis – cities and ‘retreats’
High Growth
Growth
Some growth
Little or no
growth
San Francisco
Cayman
Los Angles
Miami
New York
Dubai
Singapore
Balearics
Marbella
Madrid
Barbados
St Kitts & Nevis
Algarve
Lisbon
Milan
Tuscany
Venice
London
Sydney
French Alps
French Riviera
Paris
Hong Kong
Shanghai
Cape Town
Swiss Alps
12 Tech Cities
Source: Savills World Research
San Francisco 840,000
Austin 890,000
Dublin 530,000
Berlin 3.5m
Singapore 5.4m
Seoul 10m
Hong Kong 7.2m Mumbai
12m
Tel Aviv 400,000
Stockholm 900,000
London 8.3m
XXm = population
New York 8.4m
Summary
Most clients move from location to location
(not the portfolio approach)
Savills – tailored to the clients’
needs
Savills Private Office
combines the highest
standards of discretion and
service with the network,
resources and expertise
that only global
organisations can
successfully provide.
Trustees: duty to be informed (get the Research)
Thank you
Rupert Sebag-Montefiore
Head of Global Residential, Savills