NEARLY half of family offices said they plan to increase allocations to real estate in coming months, with an emphasis on residential and industrial sectors, according to research from Knight Frank.
Most such firms see property investments as a medium- to long-term strategy that can grow and preserve wealth, according to the latest Knight Frank Wealth Report, which surveyed 150 single and multifamily offices globally that managed an average of US$560 million each.
Over the past 18 months, 28 per cent of family offices put more funds into real estate, with office space the top category followed by luxury residential, industrial properties and hotels. Looking ahead, 44 per cent said they intended to boost their allocations, with firms in the US, Canada and the UK the most active buyers.
The overall positive outlook on property investing follows a rebound in the commercial real estate market after it contracted by almost half in 2023. Total global real estate investment has since increased 8 per cent to US$806 billion, led by the industrial sector, according to the report.
“Private capital is poised to play a critical role in the recovery,” Will Matthews, Knight Frank’s head of UK commercial research, said. “All of this points to 2025 as a turning point, with increased capital flows driving renewed momentum.”
Most of the family offices surveyed are investing in their home countries, especially those based in the US, New Zealand and Australia. Others in places such as Switzerland, Singapore and Hong Kong have a more international strategy, allocating just a third of their investments to domestic properties.
Overall, the number of high-net-worth individuals – those with more than US$10 million in assets – increased 4.4 per cent last year to 2.3 million globally, according to the report. North America showed the greatest growth, followed by Asia and Africa. BLOOMBERG
