Edinburgh has broken into the world’s top five cities within a global property investment index thanks to its increasing appeal among the international investment community.
The JLL Investment Intensity Index compares the volume of direct real estate investment over a three-year period relative to the city’s current economic size. It provides a measure of real estate market liquidity, as well as a useful barometer of a city’s overall ‘health’, highlighting cities that are punching above their weight in terms of attracting real estate investment.
Edinburgh is ranked fourth among the world’s top tier cities for overall Investment Intensity, behind only Oslo, London and Munich.
Scotland’s capital also sits in second position globally for Cross-Border Investment Intensity, testament to the attraction of the city for international investors. Only London has a higher level of cross-border investment intensity, with Frankfurt, Munich and Dublin rounding off the Global Top 5.
Earlier this year, JLL published figures showing that international investment, as a proportion of total investment, in Edinburgh’s office market increased significantly in 2016, with over 90 per cent of purchases accounted for by overseas investor, compared to just 50% in 2014.
Elsewhere in the report, Edinburgh takes the top position for Investment Intensity in the Hotels sector and also occupies second place in the Retail sector and fifteenth in the Offices sector, reflecting its position as a globally recognised financial, business and leisure destination. It is also one of only three cities – together with Oslo and Copenhagen – to rank among the Top 20 markets for investment intensity in more than two sectors.
Alasdair Humphery, Lead Director for JLL in Scotland, said:
“In recent years, Edinburgh has increased its visibility among the overseas investment community, but to break into the top 5 is a great boon for the city. There are a number of key reasons for its rise up the rankings. As a mature and transparent market with low levels of development, Edinburgh is not at risk of over supply which can depress growth. Allied to its strong fundamentals is its flexibility in the face of changing markets. The City centre is unique in its ability to accommodate a variety of different uses for land or obsolete buildings, which has been true even during tougher economic times. Finally, while the Capital’s commercial property market has been built on strong financial and professional services foundation, its recent growth in the tech sector, in particular, has provided it with a springboard to move forward as a ‘New World’ city, offering much more value and variety to investors worldwide.”