London supplants New York City as tops for real estate investment

January 9, 2018

Aside from former Trump campaign manager Paul Manafort, the interest of foreign investors in New York City real estate seems to have slipped since last year’s presidential inauguration—moving London into the number-one spot globally, based on results of a survey conducted among the members of the Association of Foreign Investors in Real Estate (AFIRE) and released on January 8.

The list of the five top global cities this year is as follows: London, New York, Berlin, Los Angeles, and Frankfurt. Significantly, San Francisco, which has been on investors’ top five global cities list since 2011, fell into 11th place; and Washington, DC, continued its slide among global cities—falling from 15th place last year to 25th this year.

In the United States, the most popular cities for foreign investment were New York and Los Angeles (tied for the first time); Seattle; Washington, DC; and San Francisco. New York had been named the top US city for the last seven years, holding a substantial lead over Los Angeles. As recently as 2014, Los Angeles was in fifth place

AFIRE members are among the largest international institutional real estate investors in the world and have an estimated $2 trillion or more in real estate assets under management globally. The 26th annual survey was conducted during the fourth quarter of 2017 by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.

“A year later, foreign investors are less concerned about the ramifications of Brexit,” said, Edward M. Casal, AFIRE’s newly elected chairman, explaining London’s rebound. “At the same time, the London market has been buoyed by several large sales over the last year. London has a number of attributes as a location for investment, including a stable rule of law, transparency, and use of the English language. In addition, a favorable time zone for international business, deep labor pool, and cultural attributes also help.”

Brazil regained its foothold as the number one emerging market, moving up from third place to replace China, which fell to second place. India moved into third place from fourth, Mexico fell from second place to a tie for third with India, and Colombia entered the list of top five emerging markets in fifth place.

Research contact: JAF@afire.org

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