For the ninth time in 10 years, London is the world's top city for attracting international real estate investment, according to new research from Cushman & Wakefield.
Despite political uncertainty surrounding the nature of the UK’s exit from the European Union, London has retained its position as the top target for international capital, with a number of high-profile office transactions enabling the city to grow 22% year-on-year.
'There are clear, and many would say growing, risks in the macro environment, but there is little to suggest the cycle is set to end or that a recession is looming,' said David Hutchings, head of investment strategy, EMEA Capital Markets at Cushman & Wakefield, and author of the annual report, 'Winning in Growth Cities'.
Europe accounts for four of the top 5 spots for international capital, with Paris and Amsterdam retaining third and fourth place for the second year and Madrid making the top five for the first time since 2009. The only German city in the top 10 is Berlin, marking a change from the country’s dominance in 2017 when three cities appeared, the most it has ever had. However, German cities continue to see very buoyant levels of demand and maintained a healthy representation in the top 25 city targets for cross-border investors.
Watching Asia
This year's research underlines the rise and rise of Asia, both as a source of capital and as an investment destination. Investment in Asia has accounted for 52% of all global deal activity, while Asian buyers are responsible for 45% of all cross-border investment.
Having increased transaction volumes into London by 47% over the year to $10.9bn, Asian investors are the strongest source of cross-border capital into the city, with offices the overwhelming target for these deals, as the sector attracts a 94% market share of Asia-Pacific flows into London.
At a city level, New York remains out in front as the largest real estate city market in the world, followed by Los Angeles and London, with Paris rising strongly to take fourth spot ahead of Hong Kong.
'Inflation is proving to be less of a threat than feared as we continue to enjoy steady economic growth. However, price signals will be enough to keep central banks in a tightening mood in most areas and the slow but sure rise in interest rates, and reduction of quantitative easing driven liquidity, will therefore continue,' Hutchings concluded.
