Failure is success if we learn from it… Malcolm Forbes
According to a new report from international real estate adviser Savills called 12 Cities, New York and London have been named as leading international cities of the world.
Savills classes cities based on their prominence and fame, as well as economy and size; factors that will determine the cross-border investability of their real estate and their future as well as their current ‘world class’ city status.
Savills ‘12 Cities‘ global ranking include:
In 12 Cities, the Savills ‘X-Factor’ world city characterization looked at a combination of global competitiveness, together with measures such as connectivity, international visitors and web search data, to determine overall world city status. Behind New York and London, using these metrics, Singapore and Paris start to rival the two leaders, while Moscow, Mumbai and Rio de Janeiro are less-established leading global cities in the top tier of twelve in the study.
“Our definition of a world city is not just based on size or economic prosperity, but other less tangible factors,” says Yolande Barnes, director of Savills World Research. “These include fame, prominence, international reach and investability – all factors that are not revealed by population and GDP figures alone. These intangibles impact on the appeal of a city to business and wealth generators, which in turn influences the pace of residential and commercial real estate market growth and contraction and levels of market stability.”
“The redrawing of the global economic map is having a significant impact on real estate markets. ‘New world’ economies, notably China and India, have recently seen weakened growth, while older industrialized economies, including the USA, UK and Japan, are now recovering more strongly than many commentators anticipated.”
“As a result, the runaway real estate growth of ‘new world’ cities has abated and in some cases, such as Mumbai and prime Hong Kong, it has reversed. The strength of investment markets in new economies are personified by Dubai’s high-growth real estate centre. Its revival is indicative of a market recovering from very full price corrections after 2008.”
Indicators for Real Estate Investment
The Savills X-Factor overall city characterization does not necessarily reflect traditional measures of economic or real estate costs and values, it speaks to the longer term stability and attractiveness of a world city destination. The three cities with the highest X-factor also appear in the top 4 for investors in residential real estate, however, they are also in the top 4 most expensive destinations for employee live-work costs.
To understand the true appeal of residential and commercial real estate as an asset class in each city, Savills has again compared gross rental income to the income available from 10 year government bonds in each country, creating a ‘net of gilt’ yield. This, they say, gives a true measure of the performance of real estate compared to the local risk environment.
By this measure, Tokyo provides the highest returns in relation to bonds and has started to be favored by more adventurous investors who understand the singular character and risks of Japanese real estate markets. New York too provides some compelling gross yield levels which have encouraged and increased investor interest.
Taking Market Temperature
In 12 Cities, Savills identifies Hong Kong, Shanghai and, most notably, Mumbai residential real estate values as looking most vulnerable to correction. New York and Sydney look to be markets with greatest scope for growth, while London and Dubai residential prices appear on the higher side of average, particularly the cities’ prime markets, but are still some way off the hottest cities.
“The redrawing of the global economic map is having a significant impact on real estate markets. ‘New world’ economies, notably China and India, have recently seen weakened growth, while older industrialized economies, including the USA, UK and Japan, are now recovering more strongly than many commentators anticipated.”
“As a result, the runaway real estate growth of ‘new world’ cities has abated and in some cases, such as Mumbai and prime Hong Kong, it has reversed. The strength of investment markets in new economies are personified by Dubai’s high-growth real estate centre. Its revival is indicative of a market recovering from very full price corrections after 2008.”
Indicators for Real Estate Investment
The Savills X-Factor overall city characterization does not necessarily reflect traditional measures of economic or real estate costs and values, it speaks to the longer term stability and attractiveness of a world city destination. The three cities with the highest X-factor also appear in the top 4 for investors in residential real estate, however, they are also in the top 4 most expensive destinations for employee live-work costs.
To understand the true appeal of residential and commercial real estate as an asset class in each city, Savills has again compared gross rental income to the income available from 10 year government bonds in each country, creating a ‘net of gilt’ yield. This, they say, gives a true measure of the performance of real estate compared to the local risk environment.
By this measure, Tokyo provides the highest returns in relation to bonds and has started to be favored by more adventurous investors who understand the singular character and risks of Japanese real estate markets. New York too provides some compelling gross yield levels which have encouraged and increased investor interest.
Taking Market Temperature
In 12 Cities, Savills identifies Hong Kong, Shanghai and, most notably, Mumbai residential real estate values as looking most vulnerable to correction. New York and Sydney look to be markets with greatest scope for growth, while London and Dubai residential prices appear on the higher side of average, particularly the cities’ prime markets, but are still some way off the hottest cities.
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WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
we are at on the a rise of the cycle in Commercial Real Estate. so there is only one way and it’s called we are going up and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
If you have any questions about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
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Walter Unger CCIM
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a little about me and my expertise – video
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https://www.youtube.com/watch?v=PPs3kpKR4nY
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