Despite the uncertainty roiling global financial markets, the real estate barons of the world are doing relatively well in 2016. Twenty-two people made the FORBES Billionaires List for the first time this year thanks to their real estate holdings, bringing the total number of the property-rich on the Forbes list to a whopping 184.
The majority of these uber-wealthy folks (we're counting those who owe at least part of their fortunes to real estate) hail from the Asia-Pacific region, which boasts a collective 99 billionaires. Of that total, 42 are from China, 25 from Hong Kong, seven from India and six from Singapore.
The United States, with 44 billionaires, boasts the most property tycoons of any nation in the world. On a regional basis, Europe is far behind Asia and the U.S. with 31 billionaires, while the Middle East and Africa have a combined eight real estate billionaires.
Notably, the fortunes of 50 Asian tycoons--half of those from that region--dropped year-over-year compared to 2015. Twenty-four, or about a quarter of the total, saw their fortunes rise, while nine were flat year-over-year. Twelve people in the Asian-Pacific nations joined the Billionaires List for the first time while four returned to it. Every single one of the new billionaires and returnees in Asia were from China or Hong Kong.
How have these tycoons managed to claw back onto the list or join it for the first time despite the headline volatility in the region? In part, because China’s economy is still growing. “China is definitely slowing down, but you’re going from double-digit growth to 6.5%,” says Nicholas Holt, head of Asia Pacific research for Knight Frank, the global real estate consultancy. This year China’s growth target is 6%-7%. Whether that’s realistic is uncertain, but compared to the 2.4% GDP growth the U.S. welcomed in 2015, that target doesn’t look bad.
The wealthiest real estate tycoon in the world, with a net worth of $28.7 billion, is China’s Wang Jianlin, who places 18th overall on the Forbes Billionaires List. His Dalian Wanda started as a commercial real estate developer, building shopping plazas and hotels. Last year two of his companies went public in China: Wanda Commercial Properties and Chinese movie theater chain Wanda Cinema Line. Wang’s fortune is now diversified, and in January he announced that Dalian Wanda Group will spend $3.5 billion to buy American film and TV production company Legendary Entertainment. Dalian Wanda already owns movie theater chain
The second-richest real estate billionaire in the world, is Hong Kong’s Lee Shau Kee, the Chinese territory's second-richest man, with a net worth of $21.5 billion, good for 31st place on the overall Billionaires List. Lee is from humble origins, and grew up in a family that could only afford to eat meat or fish twice a month. Lee's business empire encompasses real estate, hotels, energy and investments, led by flagship Henderson Land Development.
Full List: The World's Richest Real Estate Barons
Most Asian real estate billionaires owe their fortunes to commercial rather than residential properties; demand is still robust in China's major cities. “The service sector is contributing over half the growth,” says Knight Frank's Holt. Service businesses needs office and retail space, and vacancy rates in China’s major cities are indeed trending downward. Last year Shanghai welcomed rising rents, though Beijing and Guangzhou office experienced rent declines. Demand is coming from tech sector expansion, and the Hong Kong stock connect has stimulated demand in Shanghai. "It’s the American firms who are not expanding in China. The Chinese are still going," says Holt.
On the residential side in China—which has in recent years been reported to be experiencing a dangerous bubble—the market seems to have stabilized. From Q4 2014 to Q4 2015 Chinese residential properties gained 0.4%, compared to their 4.5% decline the previous year, Knight Frank’s Global Housing Price Index shows. Incomes in China have risen more rapidly than housing prices, suggesting that Chinese workers have been staying ahead of the rising cost of homes. (The opposite is true, unfortunately, in the United States, where housing prices are rising more quickly than incomes.) Here’s one bullish view on China. All of this is reason to believe that the Chinese billionaires on our list aren’t going away anytime soon.
Of course, real estate conditions vary widely by location, and declines in office rents have been seen in parts of Singapore, Melbourne, Perth and Jakarta. Residential prices in Singapore and Taiwan are both down, according to Knight Frank.
On a global basis, residential prices across 54 countries were up 3% in 2015, a larger gain than the 2.3% global residential increase for 2014. Forty-three of 55 countries that Knight Frank monitors showed positive annual price growth last year, buoyed by low interest rates in many economies. Of course, annual price changes varied widely by country: Turkey, where many Middle Eastern investors are putting their money, welcomed an 18.4% increase in prices, New Zealand 14.2%, while conflict-torn Ukraine saw residential values tumble 12% and debt-ridden Greece 5.4%. Residential values in the United States increased 5.4%, according to Knight Frank’s research, but other data indicates 2016 could bring a boost to American residential property barons since prices keep going up amid short supply (8.2% year-over-year in January for previously owned homes, according to the National Association of Realtors).
Among the 20 wealthiest property tycoons in the world, 10 are from the Asia-Pacific region: six from Hong Kong, two from China, one each from Singapore and Malaysia. Five are American and four hail from Europe (two from the United Kingdom, one from Germany, and one from Russia).
Following Wang Jianlin and Lee Shau Kee, Germany’s Michael Otto is the third-wealthiest real estate tycoon on our list with a net worth $15.4 billion, good for 51st place on the overall list, though his fortune is shared with his family. The Otto Group bills itself as the second-largest Internet retailer in the world after Amazon.com, and owns Crate and Barrel. Founded by Michael’s late father Werner, the family company is also active in real estate and financial services. Michael's brother Alexander manages the family's ECE Group, which develops and manages shopping centers (196 under management, at last count). It also develops and builds transport complexes, logistics centers, company headquarters, office complexes, industrial buildings and special-purpose properties. Another family entity manages roughly 8,300 apartments and 1.5 million square feet of industrial space in the Toronto area.
Donald Bren is the fourth-richest real estate tycoon on the Billionaires List (No. 54 at $15.1 billion), and the wealthiest American property baron. The developer owns a diverse 110 million square-foot portfolio concentrated in Southern California. His Irvine Company owns and manages more than 500 office buildings, more than 40 shopping centers, 50,000 apartments, three hotels and several golf clubs and marinas. He's expanding further into Silicon Valley with a new 100-acre development of office campuses, shops and apartments in Santa Clara, scheduled to be finished in 2019. Bren also owns a 97% stake in Manhattan's Met Life Building, which hadn't been public knowledge until 2015.
Donald Trump? He might be the most famous U.S. real estate developer, but he doesn't make the cut for our top 20, placing 36th with a net worth of $4.5 billion.
The United States added five new billionaires to the Forbes list this year. Rick Caruso, with a net worth of $3.5 billion, is the wealthiest of the new American real estate barons. He is best known for The Grove and The Americana at Brand, his shopping centers in Southern California, which are among the highest-grossing in the world. His private firm is working on plans to redevelop the Los Angeles enclave of Pacific Palisades. He is the son of Dollar-Rent-a-Car founder Henry Caruso and was president of the Los Angeles Police Commission; he has been considering a mayoral run for years.
Next is David Lichtenstein ($1.4 billion), who grew up in Brooklyn and was one of seven kids born to public school teachers. He never went to college, but built his Lightstone Group from the ground up, starting with one single-family home that he bought for $89,000 in 1986. He eventually moved into buying outlet malls and hospitality properties. When the global credit crisis hit, his Extended Stay America—a chain of mid-priced hotels—was forced into bankruptcy protection and taken over by investors including Blackstone Group. Lightstone subsequently sold 20 outlets for $2.3 billion. Lichtenstein was briefly a contributor to Forbes and wrote a popular post titled “How To Make a Billion Dollars in Real Estate.” He would know.
