Kenya is among the top-five favourite property investment locations for Africa’s super-rich, with nearly a quarter (24%) already owning real estate in the country—coming third after the UK (67%) and US (33%), according to the Attitudes Survey data for The Knight Frank Wealth Report 2018.
The Attitudes Survey collated responses of 500 of the world’s leading private bankers and wealth advisors between them represent over 50,000 clients with a combined wealth of more than US$3 trillion.
Property makes up 43% of Kenyan high-net-worth-individuals’ (HNWIs) investment portfolios, excluding primary residences and second homes. This averages higher than their African counterparts’ 39%.
The majority of Kenya’s super-rich (59%) have invested in real estate in the country, while 27% hold property interests outside the country, according to the Attitudes Survey insights. Respondents to the survey said 42% of their Kenyan clients increased their exposure to property investments in 2017, further indicating confidence in the asset class.
Art also topped the Knight Frank Luxury Investment Index (KFLII), overtaking wine and classic cars with an outstanding growth of 21% in 2017.
The strong performance follows a number of years when art had fallen behind other collectibles such as classic cars and wine. However, last year’s record-breaking sale of Leonardo da Vinci’s Salvator Mundi for US$450 million—surpassing the previous world record by a staggering US$271 million—epitomises art’s recovery.
The 12th edition of The Wealth Report reveals that the KFLII’s value rose by 7% overall in the 12 months to December 2017.
Wine, KFLII’s top performing asset class in 2016, also had a strong year and saw double-digit growth (11%)
Scarcity-driven markets, particularly for Burgundy, remained strong and demand from Asia and the Middle East continued to buoy prices.
According to The Wealth Report’s Attitudes Survey, 17% of Kenyan wealth advisors said their clients actively collect investments of passion such as art, wine, jewellery, watches and classic cars, compared to Africa’s average of 23% and 37% global.
The main reason why Kenya’s super-rich buy investments of passion is for status among peers, followed by joy of ownership, safe haven for capital, investment portfolio diversification, and capital appreciation, in that order.
