According to the latest edition of Knight Frank’s “Rise of the Super Wealth Hub” report series, Hong Kong continues to shine as a pivotal global financial hub and international asset management centre.
With robust regulatory frameworks, resilient capital markets, and crucial connectivity to the Chinese mainland, the city remains a magnet for substantial investment and business. Known for its expertise in wealth management, fintech innovation, and green finance, Hong Kong’s strong rule of law and global reputation further bolster its status as a major financial and business hub.
This report assesses the habitability and attractiveness of burgeoning wealth hubs like Hong Kong using a comprehensive method that investigates six core areas: urban prosperity, governance and talent, legal framework, enterprise excellence, lifestyle, and opulence. These indicators form a proprietary model evaluating cities based on the ‘live, work, and play’ paradigm, with each component rated on a scale of 0 to 1, with 1 being the highest score.
Christine Li, Head of Research at Knight Frank Asia-Pacific, shares, “Hong Kong has achieved exceptionally high scores in the work domain of this report assessment. In terms of work, Hong Kong stands out for its legal framework (0.91) and enterprise excellence (0.80), cementing the city’s globally renowned business and investor-friendly status.
Despite a challenging macroeconomic environment, the city has witnessed significant growth in wealth among its residents. According to Knight Frank’s 2024 ‘Wealth Report,’ Hong Kong’s Ultra High Net Worth Individual (UHNWI) population saw a 2.5% annual increase in 2023, reaching 5,957 individuals.
Projections suggest this figure could rise to 7,290 UHNWIs by 2028, a 22.4% surge from 2023, outpacing growth rates in other Asian markets like Japan, Singapore, Taiwan, and Thailand.”
Ho-Pin Tung, Head of Private Office at Knight Frank Hong Kong, adds, “Hong Kong has a long-standing and proven history as a global financial hub.
The city’s connectivity to the Chinese mainland, robust infrastructure, and extensive experience with legislation and compliance have fostered stability, making it an attractive destination for family offices to establish themselves.
Amidst ongoing turbulence, changes in legislation, and subsequent new barriers for family offices in other locations, we anticipate that Hong Kong’s position as a global hub for family offices will continue to grow.”
Assessment of Hong Kong as a Wealth Hub
FAMILY OFFICES (Thriving Amid Global Investment Trends):
Hong Kong, a crucial link between Western and Eastern economies, has solidified its status as a premier hub for private wealth management and family offices. Supported by a conducive regulatory environment and the government’s proactive initiatives, the city’s family office sector is thriving.
According to a recent study by Deloitte in collaboration with FamilyOfficeHK, Hong Kong is home to over 2,700 single-family offices as of the close of 2023. Hong Kong’s wealth management sector boasts a compound annual growth rate of 7.6% and is on track to surpass Switzerland by 2027.
As Asia’s leading hedge fund centre and the second-largest private equity hub in the region after mainland China, Hong Kong is poised for continued expansion in the family office landscape.
WORK (Strategic Hub for Global Business and Talent), LIVE (A Vibrant Urban Oasis), and PLAY (Regional Arts Hub):
Hong Kong stands out as a premier global destination, seamlessly integrating work, live, and play into its vibrant urban fabric. Strategically located in Asia, the city serves as a gateway to the Chinese mainland, making it an ideal hub for multinational corporations and entrepreneurs.
Its low-tax environment, with progressive rates from 2% to 17%, attracts skilled professionals worldwide, offering a competitive advantage over jurisdictions like Singapore. The city’s dynamic workforce is driven by a thriving service sector, including trading, logistics, financial, and professional services, contributing over 90% to its GDP.
Widely recognized for its vibrant urban landscape and bustling streets, Hong Kong offers a dynamic living environment amidst its dense cityscape, with 75% of its land dedicated to protected countryside, including beaches, woodlands, and mountains.
With numerous galleries, museums, and a zero-tariff art market, Hong Kong fosters a thriving arts and culture environment, making it a distinguished destination for both business and leisure.
RESIDENTIAL LANDSCAPE (Resilient Luxury Market Performance):
Following the Hong Kong government’s decision to withdraw property-cooling measures in February 2024, developers swiftly responded by launching new sales. Further motivated by a price decline of up to 10% since 2021, buyer activity throughout March and April sharply rose, exhibiting robust performance for the luxury residential market.
Among the notable transactions, a US$128 million (HK$1 billion) sale of a house in Mont Verra, Beacon Hill was recorded, setting a new Kowloon record at US$11,045 (HK$86,289) per square foot. Similarly, a property in Deep Water Bay sold for US$59.9 million (HK$468 million), or US$11,808 (HK$92,257) per square foot. Mainland buyers, particularly from the financial sector, have played a pivotal role in the market’s resurgence.
According to Knight Frank’s latest Global Super-Prime Intelligence Report, Hong Kong recorded 36 property transactions valued at US$10 million or more in the first quarter of this year, more than double the 15 transactions in the previous quarter. For the year ending in March, Hong Kong saw 132 such super-prime transactions, maintaining its position as the leading market in Asia.
Going forward, while Dubai is projected to see a 5% price growth in prime homes and Singapore’s prime home prices are projected to grow by -2% to 1%, Hong Kong’s residential landscape is expected to remain resilient, with prime residential prices forecast to remain stable for 2024 due to its scarcity.
