The number of Kenyan High Net Worth Individuals (HNWI) dropped by 22 per cent higher than the global decline of eight per cent in 2020 as the Covid-19 pandemic wiped out years of lucrative investment, a study said on Wednesday.
Knight Frank The Wealth Report 2021 showed that 912 people dropped from the list of Kenyans worth over $1 million (KSh109.8 million) to stand at a population of 3,323 down from 4,235 in 2019.
Consequently, the number of ultra-high net worth individuals, those worth over $30 million (KSh3.3 billion), declined to 90 from 106 in 2019.
“HNWI took a direct hit from the pandemic. With the individuals having their wealth in local currency, a currency depreciation meant a decline in net worths,” said Tilda Mwai, Knight Frank’s Researcher for the Africa region.
“UHNI have longer standing stakes with a heavy diversification in investments,” added Mwai.
According to the report, most of Kenya’s rich diversified their property investment portfolio in the Residential private rented sector (22 per cent), retail (17 per cent), offices (14 per cent) and retirement (13 per cent).
Andrew Shirley, Knight Frank report editor noted that Kenyan millionaires will increase by over 1500 in the next five years.
“Perhaps size and model predict that in the next five years Kenya’s HNWI population will bounce back by 46 per cent,” she said.
The report further indicates that 17 per cent of super-rich Kenyans are planning to buy at least one new home in 2021.
“The pandemic is super-charging demand for locations that offer green spaces as more people are increasingly focused on wellness as they spent a great deal of 2020 at home, working remotely.”
“Even though 2020 caused upheaval for most businesses and investors, there is renewed optimism in 2021 that as travel restrictions reduce and the rollout plans of the vaccination program reach an advanced stage, private capital will look to increase exposure back to the market and focus on sectors with a strong long-term outlook,” Knight Frank CEO, Ben Woodhams, said.
The top 5 popular sectors that Kenyan UHNWIs are becoming more interested in and directing investments towards are Retirement and Development land (38%), Residential private rented sector (PRS) (33%), Agricultural (29%), Healthcare and Retail (25%) and Offices (21%).