The global interior design house Candy & Candy and the Savills and Deutsche Asset & Wealth Management have together identified 12 rising cities that can surpass real estate haven in prime global cities in the next few years.
The Candy GPS (global prime sector) joint report, released Friday, revealed that cities like Tel Aviv, Chennai, Panama City and Beirut have the potential to show strong residential property price growth compared to major world cities like London ($676 billion), New York (164 billion), Hong Kong ($798 billion), Singapore ($217 billion) and Moscow ($263 billion).
Currently, these five established cities account for 40 percent or $2.2 trillion of global ultra-high wealth real estate investment in the world.
The research said that investors are now looking at alternative real estate investments both in secondary markets and second tier cities.
"Canny investors with an already full 'trophy asset' portfolio are looking with more interest at the yields available from real estate. Those looking for income-producing properties are more likely to find high and rising rental incomes in the places where capital values have not been driven by UHWI (ultra-high worth individuals) inward investment," said Paul Tostevin, associate director of Savills World Research, CNBC reports.
The report said that repeat poor performance by fixed-income markets and cautious approach toward equities has made real estate more attractive to investors.
Yolande Barnes, the London-based director for world research at Savills, said that ultra-rich do not get easily bothered by temporary fluctuations in real-estate prices in mature locations. Residential properties continue to be the favoured choice of investment for the world's 200,000 Ultra High Net Worth Individuals (UHNWIs), Business Times reports.
Barnes said that the recently released list features prominent and well established cities like Melbourne and interesting places in developing economies like Chennai, that boasts of ultra-rich residents.
Tel Aviv is listed as the top rising second-tier city, where a two-bed apartment in the heart of the town can cost around $1.45 million. In Chennai, placed at the bottom of the list, a similar accommodation is priced at just $160,000. Investors looking for a medium priced option can opt for Beirut, where an apartment is worth $500,000.
The factors that helped the cities make it to the list include English spoken as a first or second language (Melbourne, Miami, Chicago, Dublin, Cape Town), the establishment of new tech industries (Dublin, Tel Aviv), abundance of green spaces or water (Tel Aviv, Miami, Beirut) and cultural hub (Istanbul, Chennai).
