How Sub Orbital Space Travel Could Alter The Global Property Landscape

Space, the final frontier as it is known, could soon be playing a part in the property market with a new report suggesting that the launch of sub …

Space, the final frontier as it is known, could soon be playing a part in the property market with a new report suggesting that the launch of sub orbital travel presents the opportunity to radically shift global property markets.

The latest Wealth Report 2014 from Knight Frank highlights the rising trend for private wealth investment in space research from asteroid mining to sub orbital space travel.

Knight Frank has identified more than 70 wealthy individuals, with a combined wealth of over US$200 billion, who are targeting this growth sector and says that the investment promises to transform terrestrial property markets.

‘By traveling 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,’ said Liam Bailey, Knight Frank’s head of research.

‘It doesn’t take much imagination to see the dramatic impact this innovation could have on global luxury property markets,’ he added.

The report gives examples of just how quickly travel between major destinations popular with wealthy buyers could be. For example to go the 10,553 miles from London to Sydney currently takes 21 hours but in sub orbital time it would be 2.2 hours.

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Similarly, San Francisco to Singapore would fall from 16.8 hours to 1.8 hours, from Moscow to New York it would take one hour compared with 9.3 hours and Dubai to Vancouver would drop from 14.5 hours to 1.5 hours.

As the Wealth Report’s Global Cities Survey confirms, London currently wins over New York as a global wealth hub, in part because it is more convenient for African, Middle Eastern, Russian and European UHNWIs. But within a decade, this convenience premium could be noticeably reduced if entrepreneur Richard Branson’s Virgin Galactic succeeds in making his vision for sub orbital travel a reality.

‘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,’ said Branson.

Although sub orbital trips for wealthy tourists will keep Virgin Galactic busy in the short term, Branson says the next step for the technology will be to slash travel times around the world.

‘I’m very excited about a future version of our current spaceship which will make transcontinental travel clean and fast such as London to Sydney in a couple of hours with minimal environmental impact,’ Branson added.

Ticket price will be critical. 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.

‘Take second homes in Europe. Right now, demand is mainly restricted to European investors, who try to limit their travel to less than two hours. In future, that same time limit could allow Chinese or Indian investors to pop over for the weekend to visit their Tuscan farmhouse,’ said Bailey.

‘New York may well gain ground from London, but that is in relative terms. As all the global hubs become dramatically more accessible, the criteria for choosing a second home become more about the location itself, and much less about the convenience of travel,’ he added.

This article was republished with permission from Property Wire.


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