London, New York and Singapore have been named as the top three real estate metro markets for global investors, according to real estate investment management firm Heitman, while the biggest Australian cities, Sydney and Melbourne, have both fallen in ranking.
According to Heitman’s annual global prime securities strategies ranking, there were no major changes to the composition of the cities from last year, however for the first time it incorporated longer-term sustainability factors which aimed to see how the cities were adapting to a changing climate.
The other cities which were identified as top real estate markets included Paris, Tokyo, Hong Kong, Amsterdam, Los Angles, Frankfurt and Sydney.
Following this, Amsterdam, ranked 7th, and Frankfurt, ranked 9th, entered the top 10 for the first time, moving up four and five spots compared to 2018, and helped by the positive momentum from the regions’ strong sustainability rankings and the anticipated impact of Brexit on continental European cities.
At the same time, China’s biggest cities Beijing and Shanghai, which were ranked 25th and 23th, respectively, dropped four and five spots, driven down by the ongoing trade dispute between US and China, and questions around the cities’ environmental sustainability.
Heitman’s global prime real estate securities strategy aimed to provide investors access to a liquid real estate securities portfolio consisting of shares of public companies that own top-tier properties in the dominant cities.
The strategy, which traditionally looked at the best markets, investee companies and real estate investment trusts (REITs) for investors, assumed that the select assets were in high demand from investor capital due to a combination of their locational advantage, increasing value, stable income and attractive leases to credit tenants and, at the same time, they would be difficult to access through direct investments.