Knight Frank launches 2023 Wealth report

Kenya's wealthy individuals have fared exceptionally well when compared to their global counterparts, as revealed in the latest Knight Frank Wealth Report for 2023. The CEO at Knight Frank, Mark Dunford, highlighted some key insights from the report during a recent interview with CNBC Africa. The report indicates that private investors were the most active buyers in global commercial real estate investment in 2022, with Africa standing out as a lucrative investment destination. The total value of global investments surpassed 2.5 trillion dollars, providing valuable insights into the behaviors of the ultra-wealthy individuals worldwide. Dunford noted that Kenya experienced a smaller reduction in wealth compared to the rest of the world, with 65% of respondents reporting an increase in wealth in 2022, contrary to the global average of 40%. In Africa, the reduction in wealth among ultra-high net worth individuals was the lowest at 5%, setting the stage for a more bullish 2023. Globally, participants expect marginal wealth growth in 2023, but Kenya anticipates significant wealth expansion. The report highlighted a 'flight to safety' trend, with investors favoring traditional real estate assets in markets like London, New York, and Singapore. However, amid volatility in global markets, portfolios have diversified into newer asset classes and emerging markets like East Africa. Dunford emphasized Kenya's diverse property market, which includes residential, retail, office, agricultural land, and hotels. He noted a shift towards income-producing residential properties and emerging asset classes such as student housing and logistics. Despite initial concerns about oversupply in some sectors, the market is poised for growth due to increasing demand and limited supply. The CEO also addressed concerns about wealth held overseas, revealing that only 9% of Kenyan property is currently held abroad, below the global average. He attributed this to Kenyan investors' confidence in local opportunities and market understanding. Dunford acknowledged a trend of wealthy Kenyans considering secondary citizenships and foreign investments but noted a renewed focus on local opportunities post-pandemic. As for investment yields, the market outlook is optimistic, with strong returns expected across various asset classes. The CEO anticipated a recovery in Grade A office rents due to undersupply, while residential and hospitality sectors continue to show resilience. In terms of investors' preferences, residential properties remain popular among Kenyan investors, along with retail, development land, and agricultural assets. Geographically, Kenya remains a primary investment market for 60% of respondents, followed by the UK, the US, and other countries for diversified portfolios. Overall, the Knight Frank Wealth Report for 2023 paints a positive picture of Kenya's wealth growth trajectory and investment landscape, signaling opportunities for both local and international investors.