Amid the ongoing global economic downturn, it does not come as a surprise that investors try to look for new markets to inject their money in hopes of better return. This is true among the commercial real estate investors as a recent JLL report revealed that new world cities that are increasingly becoming attractive markets for CRE.
According to Seeking Alpha, 20 percent of the global real estate investment volumes came from 32 markets that qualified as new world cities. JLL defined a new world city as "typically a small to medium-sized city that has a transparent market, open real estate markets, favorable infrastructure, and dynamic economies.
"With pricing at near-record levels in many gateway cities, New World Cities can offer better value for investors and are establishing themselves as consistent and liquid markets," said Jeremy Kelly, Director of Global Research Programs at JLL.
According to JLL's Investment Intensity Index, eight out of 10 of the top cities attracting the most real estate investment in relation to their size are new world cities. The other two are already established world cities - London at No. 1 and Sydney at No. 4.
Leading the new world cities is Oslo at the second spot followed by Munich. Honolulu came at No. 5. Copenhagen, Auckland, Frankfurt, Silicon Valley and Melbourne complete the top 10.
Meanwhile, a report from the CBRE revealed that Germany has taken over the U.K. as the most attractive country for commercial real estate investment. According to The Wall Street Journal, a survey conducted by the property broker showed that 17 percent of investors indicated Germany as their top choice to invest in property. The U.K. only received 15 percent, a decline of around 50 percent from last year's 31 percent. Nonetheless, CBRE's results match JLL's in terms of having London as the most attractive city for property investment.
