International Private Capital Survey 2013/2014
Increased cross-border investment expected over the next 12 months
The survey identified an upturn in cross border investment amongst HNWI;
consistent with broader trends in international capital flows. The United Nations
Conference on Trade and Development (UNCTAD) expects foreign direct investment
(FDI) levels in 2013 to mirror those recorded in 2012. The upper range forecast
is in the region of US$ 1.45 trillion, which, if achieved, would be comparable to
the average level of global FDI flows achieved between 2005 and 2007, before
the onset of the financial crisis. The United States, China, Hong Kong (province),
HNWI PLANNED INVESTMENT ACTIVITY DURING 2013/14
Abu Dhabi
Bangkok
Dubai
Jakarta
Kuala Lumpur
Manama
Muscat
Singapore
Tokyo
Higher than last year The same as last year Less than last year
Source: Cluttons, VPC Asia
Brazil, the British Virgin Islands and the UK rounded off the top six recipients of
global FDI last year, accounting for over 40% of global FDI. While the 2012 FDI
figure is 18% down on 2011, the underlying reasons for the decline were linked
to caution amongst investors stemming from economic uncertainty in a number
of key global markets and divesting strategies linked to institutional debt and fund
restructuring launched in the aftermath of the ‘great’ global recession. Better
economic prospects for 2014, coupled with the expectation of an improvement in
the availability of global credit next year, underpin the findings of all the offices we
surveyed who expect their HNWI clients to make at least one overseas real estate
investment over the course of the next 12 months.
There is a global reach for the planned investments, with London, Dubai and
Singapore noted as the top three ranked HNWI targets in our offices. London
received the most consistent mention in terms of investment plans; however
there was a notable increase in the level of interest in Dubai compared to that
reported last year. As a result of this, Singapore was edged into third place, although
there have been no fundamental changes to the city-state’s overall HNWI appeal.
Greater detail on the issues surrounding London as an investment destination are
considered in more detail below.
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