The rise of the US

With rents growing in all five of our featured American cities, investors are increasingly looking Stateside.

23 March 2015, Words by Paul Tostevin

 

US cities are of growing interest and importance to global investors because GDP growth is strong, along with the US dollar and real estate markets.

Rents in all five US cities grew between 2009 and 2014, even though capital values were falling or weak over most of the same period. ‘New world’ cities led GDP growth – London was top of the ‘old world’, Paris and Tokyo the lowest performers.

US cities attract high levels of investment but this is mainly domestic and they have a lower proportion of cross-border deals than London, Paris and Shanghai, for example.

 
"The costs of accommodating a workforce in the 12 cities has fallen since last year, partly due to US dollar appreciation"
 

The costs of accommodating a workforce in the 12 cities has fallen since last year, partly due to US dollar appreciation – the average for residential and commercial accommodation is $69,000 per person per year, which is about the same as the average cost of our other world cities ($70,355).

The total accommodation costs (residential and commercial) in the top four cities – London, Hong Kong, New York and Paris – are closer than they have been for a while, all at around $100,000 per person, per year.

San Francisco is the most expensive US city after New York at $85,598 per person, per year, ranking between Paris and Singapore. It has seen high demand for living and working accommodation, largely from the tech and creative sector, but has limited space.

LA, Miami and Chicago are much cheaper on the world stage, ranking alongside Dubai, Moscow and Shanghai. The plummeting rouble has demoted Moscow to ninth place and further rent falls and currency weakness may push it even nearer the costs of its next rival, Shanghai.

The rediscovery and regeneration of urban living has been an important story for our world cities, particularly those in the older, established economies, which had seen post-industrial decline and deprivation.

 

 
 

Key Contacts

Yolande Barnes

Yolande Barnes

Director
World Research

Savills Margaret Street

+44 (0) 20 7409 8899

 

Paul Tostevin

Paul Tostevin

Associate Director
World Research

Savills Margaret Street

+44 (0) 20 7016 3883

 

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