The votes are in and London is the most important city in the world — at least, according to the ultra-wealthy. The Wealth Report, a new study by Knight Frank Research and Citi Private Bank, breaks down the 10 international cities that high-net-worth individuals consider the most important. 24/7 Wall St. examined the list to identify what it is that makes these cities exceptional.
The report surveyed individuals worth more than $25 million in investable assets to find which cities impress them the most. The survey focused on several factors that can make cities important, including economic activity, political power, knowledge and influence and quality of life.
A number of cities on the list are traditional hubs for business. New York and London, which sit at the top of list, are considered global financial centers. They are also important to the wealthy for other reasons, including good markets for luxury housing, strong educational resources, social stability, economic openness and personal safety.
The list also features cities in countries with emerging economies, although they generally rank lower than the established Western urban centers. Beijing and Shanghai, while already two economic powerhouses, are quickly becoming important and represent fierce competition for the old guard. In fact, a number of leading commentators believe Shanghai will be the most important city in 2050.
For each city among the top ten, 24/7 Wall St. included its estimated rank in 10 years. We included the average price of prime property for each city as well. Prime property is defined as “a location’s most desirable, and usually most expensive, property,” the price of which often reflects demand among the world’s wealthiest individuals. We also included the population of each city’s metropolitan area, which includes surrounding suburbs, based on data from the United Nations. That the cities vary in size reflects the fact that what is important to the rich does not necessarily translate to universal popularity.
These are the most popular cities of the ultra-rich.
10. Berlin, Germany
> Estimated rank in 10 years: 10
> Avg. prime property price: n/a
> Population: 3,449,540 (96th largest)
Political power is what makes Berlin so important, according to those questioned by The Wealth Report. It is “the seat of the European Union’s most powerful economy,” as writer Saskia Sassen notes in the report. In other categories, such as knowledge and influence and economic activity, the city does less well, although it remains among the top 20.
9. Beijing, China
> Estimated rank in 10 years: 3
> Avg. prime property price: $1,600/sq. ft. (26th most)
> Population: 12,385,263 (13th largest)
Beijing is the capital of the People’s Republic of China — the most populous country in the world. As a result, it is rated among the highest in the political power category. Although China is an emerging economy, Beijing does fairly well in the categories of economic activity, where it ranks sixth, and knowledge and influence, where it ranks ninth. Perhaps most notable is the fact that Beijing is rated as the city fastest growing in importance. As evidence, Beijing is expected to become the third-most important city to the wealthy in 10 years, which will put the city directly behind London and New York.
8. Shanghai, China
> Estimated rank in 10 years: 4
> Avg. prime property price: $1,800/sq. ft. (22nd most)
> Population: 16,575,110 (7th largest)
Much like Beijing, Shanghai’s status among the super-rich is increasing. Currently, Shanghai is rated fourth-highest in the economic activity category, behind only Hong Kong, New York and London. The city, which is China’s industrial and financial center, is also growing faster in importance than any other city aside from Beijing. In a survey asking what the “world’s top city” will be in 2050, The Wealth Report found the most popular answer to be Shanghai.
7. Geneva, Switzerland
> Estimated rank in 10 years: 9
> Avg. prime property price: $3,000/sq. ft. (9th most)
> Population: n/a
Geneva’s greatest strength — as perceived by the wealthy — is its quality of life. In this category, the city ranks fourth. Geneva also performs well in knowledge and influence, and, to a lesser extent, in economic activity and political power. The Wealth Report notes that because of the city’s “critical mass and mix of institutions devoted to social questions and justice for the powerless,” Geneva will emerge as a crucial player in the global community, along with Vienna and Nairobi. Prime real estate is particularly expensive in Geneva, another sign that it is a haven for the wealthy. The city is also particularly small, to the point that the UN does not provide the population of its agglomeration.
6. Miami, United States
> Estimated rank in 10 years: n/a
> Avg. prime property price: $600/sq. ft. (53rd most)
> Population: 5,749,900 (46th most)
Miami’s inclusion on this list is largely because many Latin American high-net-worth individuals consider it one of the world’s most important cities. Miami is becoming an increasingly important center for South Americans doing business in North America. Miami has seen a major influx of money from overseas, which has pushed prime property values way up. From the third quarter of 2010 to the third quarter of 2011, prime property values increased more than 19% — one of the world’s largest increases. The city, however, is the only one on this list that is expected to drop in importance in 10 years and to be replaced by Sao Paulo.
> Estimated rank in 10 years: 5
> Avg. prime property price: $2,400/sq. ft. (13th most)
> Population: 4,836,691 (60th most)
Singapore is considered to have the second-highest quality of life. It ranks fifth-highest in economic activity, eighth-highest in knowledge and influence and eleventh-highest in political power. Singapore also is listed among the cities growing fastest in importance. The city currently has the largest GDP per capita in the world at $56,532 per person. It is expected to maintain this position through 2050. According to data from the Economist Intelligence Unit, Singapore is one of the most competitive cities in the world, along with New York and London.
4. Paris, France
> Estimated rank in 10 years: 7
> Avg. prime property price: $2,500/sq. ft. (11th most)
> Population: 10,485,263 (21st most)
Paris performs fairly well in all leadership categories considered by The Wealth Report. The city also has the 11th-most expensive prime property values. According to the report, Paris has long been a popular center for real estate investments by foreigners. Since 2009, prime office rentals have increased by 17%. The city is also a major destination for business and tourism. In 10 years, however, the city is expected to fall behind Beijing, Shanghai and Singapore in importance.
3. Hong Kong
> Estimated rank in 10 years: 6
> Avg. prime property price: $4,400/sq. ft. (4th most)
> Population: 7,069,378 (38th most)
Hong Kong is seen as one of the world’s most important economic centers. At $45,301, it has the world’s fourth-largest GDP per capita and is expected to have the second-largest GDP per capita by 2050. Hong Kong is also very highly rated in the quality of life and knowledge and influence categories. The average price per square foot in the city is the fourth-highest for houses and the 10th-highest for apartments.
2. New York, United States
> Estimated rank in 10 years: 2
> Avg. prime property price: $2,200/sq. ft. (Manhattan) (17th most)
> Population: 19,425,069 (New York-Newark) (6th most)
New York is ranked second in both the economic activity and knowledge and influence categories. It is ranked third in the quality of life and political power categories. In 10 years, the city is expected to remain as the second-most important city. David Adam, managing director at Global Cities, notes in The Wealth Report that New York’s ability to attract a significant foreign workforce will keep it on top.
1. London, England
> Estimated rank in 10 years: 1
> Avg. prime property price: $4,500/sq. ft. (3rd most)
> Population: 8,631,325 (30th most)
London, which is one of the world’s top financial centers, is considered the most important city by high-net-worth individuals — and by a significant margin. It ranks the highest in economic activity, knowledge and influence, and quality of life categories. It is second in political power, behind only Washington, D.C. The city has an abundant supply of luxury housing, top-tier educational opportunities and a large population of the ultra-wealthy — all characteristics that appeal to the rich. Despite competition from emerging Asian nations, London is expected to maintain its top position for the next 10 years.
Charles B. Stockdale