The world’s wealthiest may look at expanding their real estate portfolio as they may use sub-orbital space travel to reduce travel time, believes Knight Frank.
More than 70 wealthy individuals, with a combined wealth of over $200 billion, are investing in space research projects, which includes asteroid mining to sub-orbital space travel, the global real estate consultancy said ahead of the March 5 release of its Wealth Report 2014.
“By travelling outside the Earth’s atmosphere, gravitational forces will allow spacecraft to travel at over 4,000 miles per hour, so breakfast in Mayfair could easily be followed by lunch overlooking Sydney Opera House,” says Knight Frank’s Head of Research Liam Bailey.
The consultancy believes that space travel will have impact on global luxury property markets, with ultra high net worth individuals (UHNWIs) will grow their luxury property portfolio.
Though the Wealth Report’s Global Cities Survey confirms, London currently wins over New York as a global wealth hub because it is more convenient for African, Middle Eastern, Russian and European UHNWIs.
But this convenience premium could be noticeably reduced if Richard Branson’s Virgin Galactic succeeds in making his vision for sub-orbital travel a reality.
Transcontinental travel – London to Sydney – a distance of 10,553 miles will be completed in 2.2 hours from the current 21 hours. Dubai to Vancouver, a distance of 7285 miles that currently takes a flight time of 14.5 hours, will be cut short to just 1.5 hours, says Knight Frank.
Talking to The Wealth Report, entrepreneur Richard Branson said: “New commercial space will be one of the most exciting investment sectors in the next 20 years, driven by the initial successes of companies like Virgin Galactic.
“There is already some good evidence that the leading players are receiving high levels of interest from the mainstream investment community and attracting valuations that reflect confidence in future growth and opportunity.”
In 2013, Virgin Galactic spokesperson told Emirates 24|7 that it expects thousands will take the suborbital spaceflight from Abu Dhabi.
“If approved, Virgin Galactic intends for the UAE spaceport to be the first international commercial spaceport, contingent on US regulatory approvals. The UAE spaceport will be a very desirable destination attracting people from all over the world to experience the unique view of earth from above the UAE,” a spokesperson said.
Currently, over 600 people from more than 50 countries have placed reservations. Celebs including Angelina Jolie, Brad Pitt and Ashton Kutcher are among those said to have bought $200,000 tickets.
Ticket price will play a critical role in defining the impact on real estate.
“If this is a technology for billionaires only, then property market disruption might be limited to a wider choice of global lunch options. But if the price drops to allow the merely very wealthy to access sub-orbital flights, then every assumption about current property prices will have to be reconsidered,” Bailey said.
Knight Frank has rated Dubai among the most sought after real estate destination in the world. In 2013, over 140 foreign nationalities, which includes Americans, Canadians and Europeans, invested Dh116 billion in the Dubai real estate market.
Source: Parag Deulgaonkar, Emirates 24/7 News