Insights from Global Built Asset Wealth Index
Australia ranks sixth for asset wealth per person, while China has the world’s largest built asset stock, finds the Arcadis Global Built Asset Wealth Index.
The global index estimates the value of the buildings and infrastructure – every home, school, office, rail track, waterway, power station – in 32 countries, which collectively represent around 87 per cent of global GDP.
Informed by research conducted by the Centre for Economics and Business Research, Arcadis also forecasts how the distribution of built asset wealth is likely to change over the next decade.
The index finds that the 32 countries have invested a net total of US$8 trillion in their built asset stock over the last two years.
“Clearly, emerging markets are where the money is being spent – notably China and Qatar,” says Anthony Venturini (pictured), managing director for buildings and urban development for Arcadis Australia Pacific.
“We’re witnessing a shift in power away from Europe and towards Asia – and this trend will continue over the next two decades. Australia is well placed to benefit from this ongoing growth.”
Total built asset wealth now stands at an estimated US$218 trillion – the equivalent of US$30,700 per person alive today.
In terms of asset wealth per person, Qataris now lead the way, replacing Singaporeans as the richest built asset population with a built asset wealth of US$198,000 per capita compared to US$192,000 in Singapore. Australia comes in sixth, behind Hong Kong, Japan and the United Arab Emirates.
“Over the last decade, government-focused spending on infrastructure has driven growth through Australia’s major cities. This has translated into more public buildings and social infrastructure, which in turn has sparked private sector investment. As a result, Australia is now a highly asset-rich nation,” Venturini explains.
“This does not include any mining-related infrastructure in Australia. Clearly, the data confirms that property builds wealth.”
China now has the largest built asset stock in the world with a total of US$47.6 trillion, overtaking the US total of US$36.8 trillion. China has made a net investment of US$33 trillion since 2000, substantially larger than all other economies combined.
“When you look at the asset wealth per person, China is still ranked in the bottom third – which means it has huge growth potential,” Venturini adds.
Interestingly, all the advanced nations underinvested between 2012 and 2014, bar Hong Kong, Singapore, South Korea, Canada and Australia. This group of nations was also relatively less affected by the financial crisis and subsequent downturn, as their recent growth has been closely aligned with China and less tied to the sluggish economies of the US, Europe and Japan.
Venturini says Australia’s property and construction industry will continue to perform well in the coming years. “In the short term, residential investment will continue apace, but will roll into more infrastructure spending over the decade – particularly on rail and roads. Australia will be investing in port expansion as we capitalise on growth in Asian markets.”
Arcadis, which acquired Hyder Consulting Australia in October 2014, now has more than 28,000 people working across 70 countries. Download the Global Built Asset Wealth Index to gain unique insights into which countries are investing in built assets that meet the needs of people, economy and environment.