The European strongholds of Frankfurt, London, Madrid, Milan, Munich and Paris are all still delivering growth, although the outlook for 2017 is less optimistic, says CBRE's Global Gateway Cities report, released this week.
The research, which focuses on the prime office and retail locations of 20 global gateway cities, provides data including economic, occupier and supply trends, rents, yields, and investment activity to give investors an at-a-glance portrait of key markets.
While the growth rates of the European cities analysed are all expected to slow in 2017, there are some performance hotspots, with Madrid expected to continue its GDP growth spurt of 3% in 2016 by expanding 2.2% next year. Elsewhere, the report shows that pressure on supply in markets like Munich are keeping a tight cap on yields, while investment activity is faltering in London and Paris compared to stellar figures for 2015.
'Global gateway cities offer many benefits to real estate investors. Their attractiveness to people and businesses means that space demand in commercial real estate markets increases steadily over the long-term, underpinning rental growth,' commented Chris Ludeman, global president, CBRE Capital Markets.
'These cities are highly liquid markets, where real estate investments can be readily bought and sold. Real estate in the global gateways provides capital protection and, in this era of low bond rates, a good income return. Lot sizes vary from small to huge, so large sums of capital can be deployed if necessary,' Ludeman added.
The cities in the report which were selected based on size, transport infrastructure, corporate presence and real estate investment flows, amongst other indicators, also include New York, Shanghai, Sydney, Toronto and Tokyo.
