The smart money in real estate is backing London as the top global city, ahead of New York and San Francisco according to a new survey.
Last May, we reported that hype surrounding London’s tech bubble wasn’t inflating office rents above overall property prices in London, despite concerns that soaring Shoreditch rents were pricing small startups out of the capital.
And the winner is…
London ranked top as property investors’ first choice for ‘top global city’ and the UK came third for providing the best opportunities for capital appreciation, despite being unranked last year.
Many investors are drawn to London’s growing tech scene as London’s tech firms outpace other city firms and demand more office space than any other sector.
Conducted by AFIRE, the survey showed real estate investors from 21 countries are looking beyond the traditional ‘gateway’ American cities for a slice of the international property market.
James Fetgatter from AFIRE said:
Our members’ increasing interest in cities beyond the powerhouses of New York, Washington and San Francisco points to the recognition of additional investment opportunities for foreign investors
Growth potential in London
He told Tech City News that although respondents were not asked why they chose London, “their answers are based upon their current thinking about the prospects for real estate investing in cities around the world.”
Most likely they are assuming that commercial real estate prices in London have a bit more upside than in New York. New York real estate pricing has now risen to the level it had attained prior to the global financial crisis.
Spain looking attractive
Other European cities that climbed on the list since last year were Madrid and Munich; both made an appearance in the top ten.
Investors also showed interest in Spain, named second-best for capital appreciation.
69% of respondents said they would have net increases in their European portfolio.
America still takes the cake
However, the US still remains top dog for investors. Four of the top five ‘top global cities’ were American.
The US was also cited as the most stable and secure country with 30% of respondents more optimistic about US property prices now that they were a year ago.
China remains at the top of emerging real estate markets though Latin American countries such as Brazil and Mexico featured prominently.