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Commercial property has joined equities as one of the top two assets that the rich and their investment advisers are targeting for investment this year, according to an international study just published. 
The study, published by property consultancy Knight Frank and Citi Private Bank, revealed that wealthy investors plan to allocate nearly one-fifth of their investment portfolios in commercial property and another 19 per cent in equities this year. 
They are also planning to invest one-tenth of their investments in the residential market. 
Forty private investors and 70 investment advisers from across the globe were canvassed in the study in January. Each of the investors had investible assets, excluding their primary residences, valued at over US$10 million. 
Most wealth advisers said they would recommend that one-fifth of investment portfolios were allocated to equities, with 11 per cent and 5 per cent going to commercial and residential properties respectively. 
'Commercial property is a more established investment asset class compared to residential. There is more data available on asset performance, and therefore advisers in particular tend to prefer it,' said Liam Bailey, Knight Frank's head of residential research and a contributor to the report. 
'Property is a huge and important asset class. Most wealth advisers and their wealthy clients would look to have some exposure to this asset.'  
Hong Kong and the mainland would also see investors prefer commercial to residential properties this year, DTZ  co-head of investment for China Alvin Yip Kwok-ping said.  
'In Hong Kong, some buyers have been discouraged from investing in residential properties since the implementation of the special stamp duty last year,' Yip said. 'So relatively, they would be more interested in commercial property, although both of them are hitting their historic  high prices now.' 
In a bid to curb speculation, the Hong Kong government in November announced an additional stamp duty of between 5 per cent and 15 per cent on residential apartments resold within two years.
Yip said the same argument would apply on the mainland, where the central government had implemented a series of cooling measures to curb soaring flat prices. 
The study said Monaco again remained the most expensive residential location in the world, with luxury properties priced at US$65,600 per square metre. Next came London, where a luxury property averaged US$56,300 per square metre.  
With an average price tag of US$27,300 for a square metre, Hong Kong homes were the second-most expensive in Asia and ninth worldwide, just behind Tokyo. In last year's survey,  Hong Kong was the world's fourth-most expensive city.
Knight Frank's Bailey said the slide in the global ranking was undoubtedly related to the measures adopted by the government.       
'In general, there is a view that the measures taken could mean Hong Kong avoids a crash. But there is a recognition that we are in slightly uncharted waters - very few governments have been able to carefully control price growth over time.' 
Shanghai's luxury property prices rose the most last year, at 21 per cent. Hong Kong ranked seventh in the growth stakes, as its prices for prime residential properties jumped 15 per cent last year.
Heavy exposure
The portion of their portfolios that wealthy investors plan to allocate to commercial property is about: 20%



Commercial property joins equities as top assets for wealthy