12 Cities:
The Rise Of The Digital City – H2 2015

12 Cities
12 Cities

5 October 2015, by Yolande Barnes

Cities On The Move

This edition of 12 Cities goes to press at a time when political, economic and social stability cannot be taken for granted in many corners of the globe. The turmoil of the 2008 financial crisis and subsequent geopolitical conflicts have given real estate investment a new role and significance. Many cash-rich investors have been putting money into real assets rather than paper ones, in safe jurisdictions with good title and political stability.

They appear to have been vindicated, judging by the daily increase of geopolitical and economic threats in vulnerable regions. We anticipate that core real estate markets will continue to be favoured for as long as this lasts.

The resulting focus of real estate money on globally recognised cities threatens to leave them fully valued and low-yielding. Which locations will perform next and what alternative real estate asset classes can be successfully invested?

 

Our leading article points to how the rise of the digital economy is changing geographies and property markets. The locations favoured by occupiers within cities are changing and new, small cities are increasing in importance to compete with the global giants. We explain some of the trends that we think should start changing global real estate investing criteria.

"Many cash-rich investors have been putting money into real assets rather than paper ones"

Yolande Barnes, Savills World Research

We also look at the world of income returns, recognising that some investors, fully stocked with safe-haven assets, may want to concentrate rather more on the fundamental value of income streams. Our measure of ‘net of bonds effective yield’ (NOBEY) makes a valid comparison between cities and countries and begins to point at markets that have become fully valued and those that may have capacity for further growth.

Meanwhile, international occupiers of offices and residential space can see which global cities look to be best value from their point of view. Our live-work index should prove a useful guide.

Our ‘new and improved’ World Cities Index is a response to readers’ requests to include key indicators: rents, capital values, yields and basic statistics on each of our 12 cities. They show how each city has performed over time and enable direct comparisons to be made between cities. Lastly, in our regular feature ‘Compass Points’, we have summed up four key themes for the future of world cities. I hope you enjoy this edition and find it useful in your global real estate decision-making.

Articles from 12 Cities: The Rise of the Digital Cities – H2 2015

The Digital Catch-up

05 October 2015

The Digital Catch-up

Creative office rental is catching up with the financial sector.

How Low Can They Go?

05 October 2015

How Low Can They Go?

As yields around the world fall in primary cities, investors will need to look at secondary sites for value.

Visitor Space

05 October 2015

Visitor Space

With living space at a premium in cities, living and working in the same place is becoming less affordable.

The Cost Of City Living

05 October 2015

The Cost Of City Living

Rising day-to-day living costs are forcing many city residents to rent rather than buy property.

Markets In Focus: New York & Dubai

An in-depth look at the key factors affecting the property markets of New York and Dubai.

Working Space

05 October 2015

Working Space

A round-up of the key residential and office property data from each of our 12 featured cities.

Compass Points

05 October 2015

Compass Points

A snapshot of the global property market, analysing the elements that will drive change in the future.

 
 

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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