Where should real estate investors be looking for opportunities? Surprisingly, it’s not the cities that immediately come to mind, major metros like New York, London and Singapore. Rather it’s what the US investment management firm Jones Lang LaSalle has dubbed the “New World Cities” in its Investment Intensity Index.

Spanning a three-year time period, the index looks at commercial real estate investment in relation to a city’s size. Results provide a look at real estate market liquidity, offering a window into the overall economic health of a city. The report essentially categorizes three types of cities–Established World, New World and Emerging World.

Established World Cities are the heavy hitters you would expect to be in demand by real estate investors, cities such as London, Paris and Hong Kong. These cities have competitive economic infrastructures and broad talent pools and attract large brands.

New World Cities are mid-sized, generally with a population of one to five million, with a focus on technology. These are the cities perfectly poised for real estate investment, cities with more opportunity than might be expected. Emerging Cities are the remaining category, cities whose economies have not quite come into their own, but cities that nonetheless provide opportunities for international businesses to establish trade and investment operations.

It’s the New World Cities that are the sweet spot for investors. Why? Because they have the ability to adapt to change, focus on technology and achieve mastery at high-value specializations. In fact, the report highlights that the global investment amount as a whole of these New World Cities grew from 12% in 2006 to 23% in 2016, an impressive increase. And it seems the European cities on the list might just be the most lucrative options for real estate investment as these cities excel at creating transparency for doing business, focus on green living, embrace technology, pay attention to infrastructure development and work hard to create a beneficial standard of living for residents.

In fact, the report reveals that of the top 30 cities ranked for overall investment, 12 are European. And, when factoring in cross-border activity, 10 of the top 12 are European cities. Cities such as Oslo, Copenhagen, Stockholm, Frankfurt, Munich, Berlin and Dublin all enjoy the spotlight in the JLS index. In the US, cities like Silicon Valley, San Francisco, Boston and Seattle are garnering attention.

JLL’s Director of Global Research, Jeremy Kelly, highlights the ongoing nature of the New World Cities attractiveness to investors by saying, “This is not a ‘flash in the pan’ trend; the increased investor interest in these adaptable, transparent, mid-sized markets is now a structural, rather than cyclical, feature of the real estate investment market.” Analysts report that global investments are slated to hit $700 billion in 2017, an uptick from $650 billion in 2016, with the upward trend anticipated to continue into 2018.

To find out more about international real estate investment opportunities in these New World Cities and other cities, contact Cornfield & Partners at info@cornfieldpartners.com or call us at +44 (0)20 7692 0873.

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