Welcome to our sixth survey of real estate in world cities. Welcome as well to Rio de Janeiro and Dubai, which have joined the 10 original cities this year to represent a growing interest by real estate investors in Latin America and the Middle East. The increasing importance of these property markets within their global region and their prominence on the world stage have earned them closer scrutiny in these pages.
Our definition of a world city is not only based on size or economic prosperity, but also other less tangible factors, such as fame, prominence, international reach and ‘investability’, which are not revealed by population and GDP figures alone. (By those measures, our index would be dominated by second-tier Chinese cities and sprawling US conurbations). We are interested in centres of human endeavour and innovation that attract international investors, particularly in real estate, over and above what might otherwise be expected due to socio-economic and geo-demographic factors alone.
This search for city ‘je ne sais quoi’ is illustrated in ‘The Big Picture’ feature by the reference we have made to city prominence and international visitors, as well as global competitiveness and connectivity rankings. Other organisations also search for this city ‘X factor’. For example, six of our world cities have been, or will be, host to the Olympic games.
It is interesting that 10 of our 12 cities have origins, sometimes ancient, as trading ports and harbours. While Moscow and Paris started life as more inward-looking river crossings and defensive sites, it is notable that they too lay on major trade routes.
All this leads us to conclude that it is often a cosmopolitan nature and an international outlook that makes cities globally investable and prosperous. Real estate purchase is an important element of inward investment as individuals and entities seek to own a piece of the world rather than just a piece of a particular country. Successful cities will continue to recognise this, while the imposition of long-term restrictions on international participation will risk damaging a city’s world status.