Cities' share of global investments continues to grow, a new report presented at Expo Real 2016 finds, but while domestic capital tends to focus on large tier 1 cities, international investors have become more interested in secondary cities and this trend is particularly apparent in Europe.
According to 'Winning in growth cities', a Cushman & Wakefield report, New York this year has taken London's spot as number one for cross-border investments, largely due to concerns over the impact of Brexit on the UK but also to high prices. In Europe, London remains at the top of the rankings, followed by Paris and Berlin.
'A remarkable shift has been the rise of secondary cities in the last year,' said David Hutchings, head of investment strategy, EMEA Capital Markets at Cushman & Wakefield. 'Investors are broadening the range of cities they are looking at and this is making the environment more competitive.'
The search for diversification is leading to 20-25 cities now appearing on investors' radar screens instead of the traditional ten, especially in Southern, Central and Eastern Europe, with a particular focus on good transport links, cultural and educational links and the presence of start-ups.
While in the last few years the biggest cross-border players have been North American, said Hutchings, 'they are now holding back and Asian investors, especially from China, Singapore and South Korea, are becoming more active, to the point that they could overtake the US as the biggest source of global capital next year.'
