Rich Suburbs: Sandhurst has the most multi-millionaires in South Africa

This press release is part of WealthInsight’s report on South Africa, entitled: South Africa – The Future of HNWIs to 2016: The Rise of African Wealth. http://timetric.com/research/report/WI0053MR/

Press release:

Rich Suburbs: Sandhurst has the most multi-millionaires in South Africa

Sandhurst in Sandton, is home to over 30 South African multi-millionaires, more than any other suburb in the country. It also has the highest multi-millionaire population density in the country, with one on every 20 residences being owned by a multi-millionaire, according to new research from WealthInsight.

“A combination of large plots, safety and location make Sandhurst the top suburb in South Africa for the ultra rich” according to WealthInsight analyst Andrew Amoils.

WealthInsight research also shows that:

• South Africa has the highest number of millionaires in Africa. As of 2011, there were just over 44,700 millionaires in the country, with a combined wealth of US$188 billion, accounting for roughly 25% of South Africa’s total individual wealth (US$740 billion).
• Included in this total are 543 multi-millionaires, each with wealth of over US$30 million. Johannesburg is home to the largest portion of these individuals (48% or 261 multi-millionaires). There are also sizable South African multi-millionaire populations in Cape Town (103 multi-millionaires), Durban (31 multi-millionaires) and Pretoria (28 multi-millionaires).

Definitions:

·         “Multi-millionaires” otherwise known as “ultra high net worth individuals” or “UHNWIs” are individuals with net assets of US$30 million or more excluding their primary residences

·         “Millionaires” otherwise known as “high net worth individuals” or “HNWIs” refer to individuals with net assets of US$1 million or more excluding their primary residences

·         For the purposes of this report, the phrase “review period” relates to the years 2007–2011 and the “forecast period” relates to the years 2011–2016.

Far from Equal: Previously disadvantaged groups account for only 14% of South Africa’s Ultra Wealthy at the end of 2011

This press release is part of WealthInsight’s report on South Africa, entitled: South Africa – The Future of HNWIs to 2016: The Rise of African Wealth.

According to the report’s author, WealthInsight analyst Andrew Amoils: “Despite strong transformation efforts by the ANC government since 1994, South Africa’s wealth distribution at the top end remains far from equal”

“WealthInsight research shows that there were 75 South African ultra high net worth individuals from previously disadvantaged groups at the end of 2011, which equates to only 14% of South Africa’s total UHNWI population of 543 individuals. This is a relatively low percentage considering that these groups make up 90% of the national population.”

“Things were slightly more equitable at the lower end of the high net worth spectrum, but still far from equal. Among all high net worth individuals (otherwise known as millionaires), WealthInsight research shows that there were approximately 12,500 South African millionaires from previously disadvantaged groups at the end of 2011, which equates to a healthier 28% of South Africa’s total millionaire population of just over 44,700 individuals.”

Definitions:

·         “High net worth individuals” otherwise known as “millionaires” or “HNWIs” refer to individuals with net assets of US$1 million or more excluding their primary residences

·         “Ultra high net worth individuals” or “UHNWIs” are individuals with net assets of US$30 million or more excluding their primary residences

·         “Core high net worth individuals” or “Core HNWIs” are individuals with net assets of between US$1 million and  US$30 million, excluding their primary residences

·         ‘Previously disadvantaged groups’ include Black Africans, Cape Coloreds, Indians and Chinese citizens. These individuals were restricted from voting in national elections until 1994 and were forced to live in different areas to the white population in a system known as ‘apartheid’ (racial separation).

As the UK Government sets out plans to increase the number of visiting Chinese tourists, WealthInsight research suggests lesser-known centres like Hangzhou, Wuhan and Chongqing could be the places to target for high net worth tourists in the years ahead.

On Wednesday, Jeremy Hunt, culture secretary, set out plans to “turbo-charge” the UK tourism industry, announcing an £8 million marketing campaign focused on tripling the number of tourists coming from China. “By 2030, China should have around 1.4bn middle class consumers – creating a potential market four times bigger than America.” Mr Hunt said.

Indeed WealthInsight finds that China will be fertile ground for the creation of High Net Worth Individuals (HNWI) in the coming years. According to our analysis more than 845,000 Chinese will join the ranks of HNWIs between 2011 and 2015 – equivalent to about 24 every hour (see chart). During this period, growth in billionaires will lead the way with an increase in volume of over 450% and an increase in total wealth of 600%.

China is experiencing rapid growth in the number of people with assets >£1m

Source: WealthInsight

With this rapidly expanding wealth, Chinese tourists are a lucrative market. In 2010 Chinese tourists spent £1,677 each per visit to the UK according to Visit Britain, three times more than the average. And the latest UNWTO World Tourism Barometer shows that Chinese expenditure on international tourism increased by 32% in 2011; reaching $73bn (see below). Mr Hunt’s strategy is intended to ensure the UK doesn’t lose out to other European countries like Germany and France, who currently attract more visitors from China.

China was the 3^rd top source market for international tourism expenditure in 2011

Source: UNWTO World Tourism Barometer

To do this the government will increase marketing and airline connections in cities beyond traditional wealth centres like Beijing and Shanghai. Recent WealthInsight research could be of help. Our analysis sheds light on some of China’s lesser known centres for growth in ultra-HNWIs (those with assets over >$30m), highlighting Tier II and Tier III cities like Hangzhou, Wuhan, Chongqing, Chengdu and Fuzhou, as growing wealth hotspots. These are the places high spending Chinese tourists will be coming from in the years ahead.

City	Growth in UHNWI's (2011-2015)	UHNWI's, 2011	Predicted UHNWI's, 2015
Fuzhou	90-100%	50-100	100-150
Chongqing	85-95%	50-100	150-200
Hangzhou	75-85%	500-600	950-1050
Chengdu	75-85%	100-150	200-250
Wenzhou	75-85%	100-150	150-200
Wuhan	70-80%	100-150	150-200
Tianjin	65-75%	150-200	250-300
Changsha	60-70%	100-150	150-200

Source: WealthInsight

Analyst Contacts:

Christopher Rocks

christopher.rocks@wealthinsight.com

020 7406 6711

Andrew Amoils

andrew.amoils@wealthinsight.com

020 7406 6564