A new report by Jones Lang LaSalle has determined that more than half of all global commercial real estate investment resides in 30 cities, while one-quarter of the total investment is in five cities: London, Tokyo, New York, Hong Kong and Paris.
According to the report, titled ‘A New World of Cities,’ the dominance of these major metropolitan markets is set to change by the turn of the decade when fast-expanding commercial property markets in Beijing, Shanghai, Moscow and Sao Paulo will become serious contenders in real estate investment.
‘We are already seeing a shift in where real estate investors are sending their capital,’ says Peter Roberts, CEO for the Americas at Jones Lang LaSalle. ‘The top 30 cities for real estate investment will become the top 50 as investors diversify their portfolios and corporate occupiers expand their geographic footprints to include emerging cities.Â Advances in digital communications contribute to this expansion because companies will no longer have to physically cluster in some of the world's largest cities.’
Roberts adds that the U.S. will continue to be the most dominant nation in the global commercial property industry.
‘Nearly half of the world's office stock is located in the U.S., and more than one-third of all commercial real estate investment takes place in U.S. cities,’ he continues. ‘Eleven of those cities are expected to feature among the world's top 30 largest cities by [gross domestic product (GDP)] by 2020. Six of the top 30 fastest-growing cities in terms of absolute GDP will be in the U.S., including New York, Los Angeles, Chicago, Washington D.C., Dallas and Houston. Over the next decade, 16 of the top 20 fastest growing mature cities will be in North America. Austin, Texas, and Raleigh-Durham, N.C. will be at the top of the list driven by technology, high-value activities and commitment to innovation.’
The full report is available online.