cushman & wakefield releases 'winning in growth cities' report, with
hong kong, shanghai and beijing all placing in top 25
oct 11, 2019
• ‘winning in growth cities’ report sees us cities outperform, with volumes for their top cities up 12% on the year
• london retains its status as the most attractive city for cross-border investment
• led by singapore followed by south korea and greater china, apac is the largest source of cross-border capital for the fourth year running
• mainland china remains an attractive market for investors and growth is continuing
shanghai, october 11, 2019 —— new york has strengthened its position as the number one global city for real estate investment, growing 20% year-on-year to take the top spot in cushman & wakefield’s ‘winning in growth cities’ investment report. the annual report examines global commercial real estate investment activity, assessing cities by their success at attracting capital.
cushman & wakefield’s top cities for real estate investment (excluding development)
source: cushman & wakefield, rca
the usa took 13 of the top 25 places, nine of which saw volumes rise on the previous year, led by boston (up 66%), seattle ( 38%) and san francisco ( 35%). this has been led by robust domestic demand and the enduring appeal of core, liquid real estate markets given the low level of returns from alternative investments and the low cost of finance.
europe meanwhile had five cities inside the top 25 locations, led by london (4th) and paris (5th), with madrid clearly the fastest-growing european target, with volumes up 144% to take 21st place overall (3rd in europe).
greater china claimed three of the top 25 cities, with hong kong ranking 9th, and shanghai placing 20th as volume dropped 17% from last year. beijing meanwhile was the fastest-growing major asian city, with volumes doubling, resulting in the city moving up 11 places in the ranking to number 25. as a region, the asia-pacific (apac) earned seven of the top 25 cities in the global ranking.
according to cushman & wakefield’s data, overall global investment volumes in real estate have plateaued, reaching usd 1.02tn – a 0.7% fall. nonetheless, demand remains at record levels with domestic and regional investors, rather than global players, driving activity. high pricing and stock shortages have held back activity, with investors by and large unwilling to embrace riskier markets or push up pricing given the uncertain interest rate and growth environment.
a slowing in china’s growth and the lagged impact of monetary tightening will also bear down on global demand and deliver sluggish growth. however, even if it is slowing, mainland china remains an attractive market for investors and growth is continuing.
francis li, head of capital markets, greater china at cushman & wakefield, said: “there are tremendous investment opportunities in tier-1 and select tier-2 cities for short- to medium term investors and the winning markets tend to be where supply is relatively modest, notably beijing, and where pricing is comparatively attractive, such as guangzhou and chengdu. for mid- to long- term investors, investment opportunities also lie in cities with good infrastructure and rapid socioeconomic growth but higher levels of supply such as shanghai and shenzhen.”
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cross border investment
among international buyers, london is once again the market to beat, with brexit considered a tactical issue with respect to timing and price rather than a structural hit to its appeal. new york came back strongly to regain second place amidst increased competition from a range of cities such as paris, madrid and sydney. volumes spent by cross border investors dropped 2.7% on the year.
due to a mix of risk, liquidity and steady growth, european cities remain most popular with foreign investors, with 12 of the top 25 global targets, followed by seven in the usa and six in asia pacific. however, the most impressive gains in market share over the past year were seen in asian cities, most notably beijing, up 52 places in the global ranking, as investors sought new opportunities, particularly in higher-growth markets.
the sources of capital crossing borders into real estate also grew more diverse in the past 12 months. for the fourth year running apac – led by singapore, south korea and greater china – remained the biggest source region overall despite outbound volumes dropping nearly 13% and its market share easing to 38% overall. by contrast, north american capital increased 18%, capturing a market share of 30%, its highest share since 2015. european outbound capital rose 3.3% to 27% of all cross-border spending.
carlo barel di sant’albano, head of global capital markets at cushman & wakefield, stated:
“ongoing headwinds, such as geopolitical unrest, means economic growth will remain in doubt in the months ahead, but it also means quantitative easing and negative interest rates are back on the agenda. as a result, property yields will be seen to offer better value and could fall into 2020 once investors have more faith that the cycle still has some life in it. however, buyers will have to find additional opportunities if they are to allocate capital, with a particular focus on alternatives and residential/multifamily likely to be seen.”
david hutchings, head of investment strategy, emea capital markets at cushman & wakefield and author of the report, added: “the winning markets of 2020 will be the biggest and best across gateway and challenger cities, but increasingly those with the right mix of strong innovative governance on the one hand and appeal to talent on the other.”
please click here to download the report
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about cushman & wakefield
cushman & wakefield (nyse: cwk) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. cushman & wakefield is among the largest real estate services firms with 51,000 employees in approximately 400 offices and 70 countries. across greater china, there are 20 offices servicing the local market. the company won four of the top awards in the euromoney survey 2017 and 2018 in the categories of overall, agency letting/sales, valuation and research in china. in 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. to learn more, visit www.cushmanwakefield.com or follow @cushwake on twitter.
for further information, please contact:
mandy qian
director, marketing & communications, greater china
tel: 86 10 8519 8040
mandy.qian@cushwake.com
