Rich Kenyans have continued to bet big on the country's booming real estate market, placing a quarter of their wealth in the sector that has more than doubled in size in the past decade, a new report says.
Out of a total asset base of Sh2.7 trillion (
"In 2013, real estate was the largest asset class for the HNWIs in
The report also shows that the super-rich are slowly returning to the fixed income market, nearly doubling their presence in there in the past five years.
The findings by New World Wealth are in line with recent market trends that have seen investments in high-end residential and commercial housing grow steadily as prices rise.
This level of wealth multiplication has caught the attention of
The real estate investment market is expected to remain fairly flat in the next couple of years to account for 26.5 per cent of the wealthy's total assets in 2017.
"With residential property prices now substantially flat and existing home owners and landlords no longer enjoying year on year capital appreciation, investment in property is beginning to lose its sparkle," said Hass Consult head of marketing and research
But the report also shows
Equities market was the second most favoured investment class for
The super-rich have invested Sh275.2 billion in Nairobi Securities Exchange-listed companies according to the report, meaning that this small group of individuals controls more than 10 per cent of total investor wealth at the bourse.
A sustained bull run at the NSE in the past two years has seen these investors more than double their wealth, a trend that is expected to continue in the next four years.
READ: Stock market earns investors highest returns in 2013
Over the past five years, however, these individuals have reduced their investments in equities from 25.7 per cent to 23.9 percent, a development that appears to be informed by the fact that the super-rich may be harvesting part of their holdings through property sales.
The New World Wealth report shows that rich Kenyans cut their holdings of foreign equity from 15.12 per cent to 13.6 per cent of their total wealth in the wake of the global financial crisis and the subsequent recession in developed economies.
They have, however, raised their presence in the fixed income market where they now have Sh223.6 billion or 8.3 per cent of total assets up from 5.5 per
Investors in this asset class put their money in Treasury bills and bonds, which are mainly popular because of the low level risk and the steady rise of yields in the past five years.
Investments held in business interests stood at 17.8 per cent of total assets in 2013 or Sh481 billion (
The emergence of a new crop of high net worth individuals in construction, real estate, telecoms, banking, transport and logistics industries has convinced market watchers to project that the rich will increase their holdings in this area to 18.2 per cent in 2017 to Sh645 billion (
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