Interesting Article on Urbanization and the Role Future cities will play in that Growth. Not surprising, Toronto is in the middle of the pack when it comes to the listing, and for the amount of direct commercial investment it receives from offshore backers.
The theme for this year’s World Economic Forum Annual Meeting is The Reshaping of the World: Consequences for Society, Politics and Business. Rapid urbanization is clearly one key force driving that change, and new research from Jones Lang LaSalle indicates that real estate is emerging as a major factor reshaping the world’s cities.
Traditional thinking sees real estate as a product or consequence of a city’s success: successful cities attract real estate investment. What we’re finding, though, is that real estate can actually drive a city’s success, attracting investment capital which then contributes to a city’s ability to attract the new business that will make it more successful.
Which cities benefit? While investors around the world are increasing their allocations to real estate, they’re focusing on specific city types.
We’ve looked at the world’s 30 top cities for direct commercial real estate investment. We’ve divided them into three groups: “super cities” (think London, New York, Tokyo or Paris), “primary cities” (Los Angeles, Singapore and Beijing among them) and “second-tier” markets (Seattle, Berlin, Osaka and others).
Over the past decade, these 30 cities have accounted for half the $4.6 trillion total in direct real estate investments. If real estate markets were football/soccer teams, these would be competing for the World Cup.
The dynamics are interesting. Growing cross-border capital investment has boosted demand for commercial real estate in super and primary cities, from London to Beijing. This flood of capital means there are no longer enough attractive property investments in these markets, causing investors to look to somewhat riskier places to allocate their funds.
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