KENYA – Kenya has the fastest growth of individuals worth a US$1 million (KSh100 million) in the world, with majority investing in property, Knight Frank’s 2020 Wealth Report shows.
Kenya’s wealthy have identified healthcare and retirement property as the most interesting areas for commercial real estate investment in 2020
In a survey of wealth managers across Kenya, 27% reported that their clients were planning to invest in commercial property in 2020.
According to the report, the number of a dollar millionaires in the country has grown 263 per cent since 2014, hitting 2,900. They are expected to rise to 3369 by 2024.
The number of billionaires’ worth over US$30 million (KSh3 billion) in the country which currently sits at 42 is on other hand expected to grow to 48 in the next five years.
South Africa is leading the continent with 1,033 such individuals followed by Nigeria 724 and Morocco 215.
This clique of wealthy individuals is no longer interested in growing their fortunes but instead enjoy collecting works of art at their high-end homes.
”Two-thirds of the wealthy investors had reduced their holdings of now volatile cryptocurrencies, holding their investments broadly static in property and collectibles, such as works of art,” the report indicates.
Healthcare and retirement property are the main areas of interest for commercial real estate investment in 2020 by Kenya’s creme de la creme.
At least 27 per cent of wealth managers said their clients were planning to invest in commercial property in 2020.
The segment has become luring as Kenya’s population over-55 now passes 3.5 million people.
Commercial property in healthcare and retirement typically spans care homes and daycare centres, private hospitals, acute hospitals and surgeries, dentists’ surgeries, pharmacies, supported living and retirement villages.
According to Ben Woodhams, Managing Director Knight Frank Kenya, the wealthy are most worried about the impact of global economic uncertainty, followed by poor governance, and Brexit.
“The survey points a sharp rise in social and environmental awareness by the country’s wealthy as reflected in their investment strategies and behaviours,” Woodhams said.
He added that the shift coincided with a general move in investments towards lower risk holdings, with Kenya’s wealthy increasing their holdings of bonds, gold and cash.
According to the report, two thirds of the wealth managers in Kenya reported that their clients increased their private equity investments in 2019.
Managers reported the wealthy were most worried about the impact of global economic uncertainty, followed by poor governance.
The managers also reported the heightened interest of the wealthy in supporting education, the arts, and the environment.
Conversely, the real estate segment drawing the slowest growth in individual interest is industrial property, which was recently the golden child of the sector.
Wealth investors also have a renewed appetite for real estate in 2020 due to the surging interest in student housing, as Kenya’s first green bond was launched to fund student housing.
