Consulting firm Cushman & Wakefield published its annual report «Winning in Growth Cities».
What is this about and what could be interesting in it?
This is statistics and analytics of activity on the global real estate investment market, evaluating cities by their attractiveness to capital markets.
According to this company, global real estate investments amounted to $1.8 trillion over the year. That is, they grew by 18% (compared to $1.5 trillion the previous year).
What does this mean? Investors are increasing their investments in real estate. There are no signs that the economic cycle is ending or a downturn is approaching.
Meanwhile, investment volumes in North American real estate showed no growth. The Asian market grew strongly by 32% and the European market by more than 16%.
As for cities, New York remains the largest real estate market in the world with a volume of $50 billion per year. At the same time, investment volume in it decreased by 3.4% compared to the same period last year.
Among European cities, London remains the leader, while Paris showed strong growth and nearly matched volumes (about $35 billion).
In fifth place by market volume is Hong Kong, which grew by 70% over the year.
Who are the investors?
Investors from Asia and the Pacific region (APAC) continued to dominate cross-border real estate investments with a market share of 45%. The total volume of cross-border investments approached $400 billion (about 20% of total real estate investments). Thus, 80% of the total volume was invested locally.
Chart. Sources of foreign capital.
Which regions are they investing in?
185 billion US dollars (about 50%) of cross-border investments attracted European real estate markets, with 2⁄3 of the investments coming from global markets and 1⁄3 from regional ones. $140BN (about 35%) consisted of cross-border investments in Asian and Pacific region countries (APAC), largely ($120BN) being regional investments.
Chart. Directions of international capital investment.
What alternative sectors are interesting for investment?
Table. Investment direction by sectors.
It can be noted that there is high growth in investments in data centers across all regions, especially in Asia and the Pacific region. The average yield of such real estate is 5.5%-6% per annum.
Investments in student housing grew by 26% in Europe, Central Asia and Africa (EMEA) with a yield of 3.5-5.5% per annum. Particularly noteworthy is London, where $2.5 billion was invested in the student housing segment (about 30% of the entire European market).
