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WINNING IN GROWTH CITIES2015/2016
A Cushman & Wakefield Capital Markets Research Publication
Source: Cushman & Wakefield, RCA
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Top 25 Cities Rest of Market Global Yields
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• In another strong year for global property, volumes rose 16% to $943bn and values continued to push higher.
• The uncertainties of the global economy left their mark, however, with some investors growing more selective and in many cases refocussing on the biggest and most liquid gateway city markets.
• The top 25 cities in fact outpaced the rest of the market and now hold a 53% market share, with risk aversion, profit taking and an improved occupier market lying behind the allure of these cities.
• Global volatility also continues to promote cross border investment, with foreign buyers raising activity by 21% to take a 28% overall market share.
• Although North American money dominates these cross border capital flows, Europe was actually the fastest growing source of international investment. Asian global investment also grew strongly; however, this was at a slower pace and with a focus on a handful of markets led by the USA.
TRENDS IN THE GLOBAL MARKETGROWTH CONTINUES, BUT CAPITAL FLOWS ARE EVOLVING
THE TOP 50 CITIES FOR INVESTMENT VOLUMES (EX. DEVELOPMENT SITES) *Compared to previous 12 months. Source: Cushman & Wakefield, Real Capital Analytics
The top 25 cities saw volumes rise 20.5% compared to 10.8% in the rest of the market
THE TOP FACTS:
Half of the top cities 50 are in the Americas24 are in the US alone
New York outgrew the rest and saw nearly 8% in global market share
CAPITAL FLOWSAN INCREASINGLY CROSS-BORDER WORLD FOR CITIES
USA $66.8 bn
the biggest source of cross-border capital globally
London took 16% of all cross-border activitymore than the next 4 markets combined!
Fastest growing cross-border investment cities?
Singapore$15.7 bn2nd biggest source of cross-border capital globally (and biggest in Asia Pacific)
Mumbai was the fastest growingemerging market target for cross-border capitalat 240%
San Diego Copenhagen Auckland
Which region was the fastest growing source of global investment
capital?Europe at 28%
SECTOR LEADERSWHICH CITIES TOP THE TABLES FOR PROPERTY INVESTMENT BY SECTOR?*Compared to previous 12 months. Source: Cushman & Wakefield, Real Capital Analytics
OFFICE INVESTMENT VOLUMES
RETAIL INVESTMENT VOLUMES
INDUSTRIAL INVESTMENT VOLUMES
DEVELOPMENT SITES INVESTMENT VOLUMES
HOTEL INVESTMENT VOLUMES
MULTIFAMILY RESIDENTIAL INVESTMENT VOLUMES
WHAT MAKES A WINNING CITY?
While the economic outturn has disappointed this year, the outlook is for improved growth into 2016 thanks in general to better domestic demand and corporate investment.
David Hutchings, EMEA Investment StrategyCushman & Wakefield
3.0%-3.5% 17%Risk Alert Long Cycle Ahead
LOOKING AHEADWHAT’S IN STORE FOR PROPERTY INVESTMENT
Anticipated slow down pushed back 1-2 years to 2017/18 amidst low inflation, lower-for-longer interest rates and a generally slow restart to development activity (to date)
New era of risk & opportunity may be emerging, shaping the investment landscape and challenging the existing patterns of winning cities
Expected global property investment growth over the year to mid-2015, reaching a record high of US$1.1 tn
Forecast economic growth in major cities during 2015/2016 – outperforming many national averages
Looking ahead, while increased global uncertainty will continue to affect investors, corporate confidence is still generally high and, allied to the changes in demand being wrought by new living and working practices, this underpins a fundamentally robust outlook for good quality real estate.
Carlo Barel di Sant’AlbanoCEO, Global Capital Markets, Cushman & Wakefield
CUSHMAN & WAKEFIELD LLP43/45 Portman SquareLondon, W1A 3BGTel.+44 20 7935 5000
Cushman & Wakefield Copyright 2015. NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IS MADE TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE, AND TO ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) IN QUESTION.
DAVID HUTCHINGSHead of EMEA Investment Strategy+44 (0) 20 7152 5029+44 (0) 7793 [email protected]
