Built asset wealth in UK to reach 5.7 trillion by 2025

17 November 2015 Consultancy.uk

Total built asset wealth in the UK has a combined worth of around $4.8 trillion, research by Arcadis and the Centre for Economics and Business Research finds. The UK comes in at number 13 of a total of 32 countries analysed in terms of total built asset wealth, while it comes in at number 17 for per capita wealth. According to the report, the UK will lose ground slightly in the coming years.

Worldwide engineering consultancy Arcadis, in collaboration with the Centre for Economics and Business Research (CEBR), recently released* its second edition of the 'Built Asset Global Wealth Index’. The Index brings the value of the global built assets – buildings and infrastructure – and its development for the next decade, into focus. For the study, the value of the total built assets of 32 countries worldwide were estimated; countries which together account for around 87% of annual global GDP.

Total built asset wealth

The total value of the built assets in these 32 countries in 2015 amounted to just over $218 trillion, about $25 trillion (13%) more than the estimated value in 2012 ($193 trillion). This equates to nearly $31,000 per capita globally, and an average of $86,500 per capita in the economies surveyed. The US, the leader of the pack until last year, and China, the list’s new leader, account for 39% of the total $218 billion in property and infrastructure, while the top 10 and top 20 account for 59% and 75% respectively. Over the next 10 years, the value of built assets are set to increase sharply, hitting $302 trillion by 2025. Key drivers of growth are the growing world population, the rising middle class in developing countries and the need for infrastructure replacements and expansion.

The UK falls
In 2015 the UK comes in at number 13 on the list of the 32 countries surveyed, with an estimated asset value of $4.82 trillion. This places the UK on the lower end of Western European countries surveyed, with the Netherlands and Belgium following behind at spots 20 and 24 respectively. In the previous (2012) edition of the Index the UK stood on the 11th spot with an estimated value of $5.54 trillion, since then the UK has been overtaken by amongst others Brazil, whose total built assets grew from $4.79 trillion to $6 trillion in 2015.

Total built asset wealth - per country

The report makes a projection about the coming decade, finding that the UK will drop a further place, because the value of the built assets in emerging countries, such as Indonesia and Saudi Arabia, are expected to grow faster than those in the UK. Spain and Turkey are expected to fall four places on the list in the same time period, but the largest decline will be seen in Russia (-7 places), where the value of buildings and infrastructure over the next decade is set to drop more than $2.5 trillion.

Asia wakes up
The visible trend in the rankings, and predictions for the next decade, is that emerging economies are increasingly taking the baton from developed economies. China in the past three years took over the US’ top spot. Between 2012 and now, the value of Chinese buildings increased more than $12 trillion to $47.6 trillion, while in the US, built asset values decreased nearly $3 trillion. Although it is expected that the US will add about $9 trillion to its total built asset value by 2025, that is marginal compared to China, which in the same timeframe will see its built assets value grow to $97 trillion - more than double the US’ and nearly a third of the total value of the buildings in the 32 countries (2025: ~$302 trillion).

Total built asset wealth - per inhabitant

Other countries in Asia and the Middle East are also advancing rapidly, with the Philippines and Indonesia the fastest to rise (each +8), followed by Saudi Arabia and the UAE, both rising five places. The next 10 years will see the total value of assets within the four biggest climbers nearly double in value. Such increases further occur only at the bottom of the list – with Ghana and Qatar also seeing relatively big increases in the value of their built asset values. However, in 2025 Qatar tops the list of highest value per inhabitant of asset wealth, followed by small states of Singapore and Hong Kong. The UK comes in 17th place on the ranking, followed distantly by Russia and Malaysia, with Poland the only European country behind the UK at number 20. The only top five player who does well in the top 10 countries with the most value per capita is Japan – at 4th place on both lists.

* The first 'Built Asset Global Wealth Index' was released in 2013 by the British EC Harris, which has since the merger in 2011 become a part of Arcadis. The 2012 index did not include Belgium and Ghana.

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