Private wealth emerges as a top commercial property player
In the 20th edition of The Wealth Report, we’re revisiting our predictions over the years to see how they’ve fared.
We forecast that private capital would become a dominant force in commercial real estate investment.
We track how and why that prediction was right on the money.
In the first Wealth Report, our Attitudes Survey showed HNWIs were focused on residential property – CRE accounted for just 2.6%. 16 years later in 2023, the survey revealed 21% of HNWI investable wealth was allocated to commercial property. This trend was influenced by:
- The significant growth of private investor wealth, especially emerging market wealth
- Wealthy individuals taking a more professional, structured approach to investing
The flexible firepower of private wealth
Quick decision-making, access to diverse capital streams and higher tolerance for risk can put HNWIs in a better position to take advantage of global property cycles than institutional funds.
“When interest rates rose sharply from the low levels seen between 2009 and 2022, there was a period where the main buyers of London offices – institutions, sovereign wealth, and private equity – to some extent withdrew from the market,” says Braybrook.
"Conversely, private individuals and the offices of private investors were very active.” If you’d invested in commercial property in London when the first edition of The Wealth Report was highlighting its potential, you’d have done very well, according to Braybrook. “Even during downturns, your investment would still have been generating a good income. What’s not to like?”
