New York and London are world's investment superpowers

For the third year in the row, New York is the biggest market in terms of commercial real estate as Warsaw moves up the list.

During the EXPO Real in Munich, Cushman & Wakefield presented its yearly report Winning in Growth Cities. The study shows, that during the last year the volume of commercial real estate investments worldwide has risen by 16,7 % and reached a total value of 649 billion dollars. New York took the first place in terms of investments procured.

According to the majority of indexes, demand for real estate will rise and reach new markets. The market share of foreign funds will increase due to the increased acceptance of risk among the investors. If the liveliness of American economy will continue, it will eventually cause the rise of trust and economies in other countries and make the next year very fruitful for many market sectors. Stimulation and liveliness will give rise to capital value in case of high quality space given a strong demand among leaseholders - comments Carlo Barel di Sant' Albano Executive Director in Cushman & Wakefield.

Among the top 25 cities most attractive for investors one can find New York, London, Los Angeles, Tokyo, San Francisco, Washington and Hong Kong. In comparison with the previous year only few changes in top places were made - Beijing and Stockholm have dropped several spots, to be replaced by American and German cities like Denver and Frankfurt. In the first ten, the fall of Paris from fourth to eight spot was noticeable.

Although the share of office sector in the market has decreased from 48 to 45 percent, it still is of highest interest to the property developers. Until now, the majority of significant players on the market concentrated primarily on office properties. Currently, they are starting to show interest in other sectors especially those big investments connecting housing and commercial space.

Which factors influence the investors' decision to choose one city over the other? According to authors of the report, among the major contributing factors are: employees' qualifications, innovativeness and the quality of living. Two top cities on the list received high score in all three categories. High notes were also given to Paris, Tokyo, Hong Kong, Singapore and San Francisco.

David Hutchings, the head of European department of research in Cushman & Wakefield, stated - Investments activity concentrates primarily around a handful of cities, but, due to the fact that the market of investments in the real estate will develop and include more and more participants, one should expect the increase in competitiveness between cities. In the future, the group of big, dominating cities will grow or remain unchanged, while some locations taking high places in the list will have to prepare for possible loss in popularity among the investors.

Warsaw

The Polish Capitol has recorded an increase in real estate activity. Volume of investments between June 2012 to June 2013 has increased by 20,8 percent to a total of 2,38 billion dollars. Meanwhile, the increase in investments value reached 16,7 % and 6,2 % in global and European scales respectively. It means that the position of Warsaw has increased from 52nd to 47th. The most popular sector in the capitol was the real estate. In this part of the market, the sales have nearly doubled, what has given the Warsaw the 30th place in the biggest real estate markets in the world. The value of foreign capital invested in the city has also risen. Thanks to that, Warsaw now holds 14th place in the world and 5th place in Europe in terms of foreign investments.

Warsaw has a growing popularity among the foreign investors, what can be seen through a significant increase in investors activity in the last twelve months. The predictions concerning economy are getting better, stable demand on rent market and supply of high quality real estate allow us to think that in the last quarter of 2013 the volume of investments will noticeably increase. Moreover, many new investors which are just starting to explore the East - Central Europe, will occur on the capitol's market - said Charles Taylor, Managing Partner in Cushman & Wakefield Poland.

Full report in PDF file can be downloaded below.

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