Large cities in China and India, and midsize cities in Europe and the United States are the next hot spots for commercial real-estate development, according to a report by the world´s largest real-estate services firm. Dozens of cities that were overlooked by investors in the past decade will become hubs of commercial development because of economic growth, the re-emergence of technology and the desire of companies to be based near tourist destinations. The report, released Thursday, is part of Jones Lang LaSalle´s effort begun last year to identify cities with potential investment opportunities.
The report focused largely on China, whose economy grew 9 percent to 10 percent in the first quarter of this year. Chinese cities including Shanghai, Beijing and the area known as the Pearl River Delta are expected to become 'mega-cities,' with more than 10 million people. Shanghai has been listed in some reports as using nearly a quarter of the world´s construction cranes.
In the United States and Europe, technology-rich cities including Austin, Texas; Raleigh, N.C.; and Helsinki, Finland, will emerge as real-estate hot spots, the report stated. 'Despite the technology shakeout of the last few years, we believe that technological richness is re-asserting itself as a key competitive advantage for both mature and developing city economies,' the Jones Lang LaSalle report said.
The company stopped short of predicting a full-fledged recovery in the technology sector but said the technology industry has historically attracted the most educated work force. What´s more, research facilities and buildings designed to accommodate high-tech requirements have generally received heavy interest from real-estate investors.
Jones Lang LaSalle analyzed 400 cities, looking at a variety of economic indicators including demographics, government and cultural issues. The company said any city attempting to improve its urban landscape and attract tourists will also see a commercial real-estate boom. Barcelona, Spain; Copenhagen, Denmark; Calgary, Alberta; and South East Queensland, Australia, top this list. 'We have seen how the ´leisure factor´ has contributed to the success of cities such as Las Vegas and Dubai [in the United Arab Emirates], and several cities with expanding leisure activities will [be] among the future rising urban stars,' the report stated.
Jones Lang LaSalle said most cities in its report would have been labeled 'unconventional' five years ago. And statistics show that interest in real estate in such places as Asia and Eastern Europe still lags behind traditional marquee cities such as New York and London.
The Association for Foreign Investment in Real Estate, a Washington-based group that tracks real-estate markets worldwide, did not include any Asian or Eastern European countries in its 2002 rankings of the most stable real estate-markets. The association ranked Washington the top city for foreign real-estate investors, ahead of London, Paris, New York and Milan.
Source: Jones Lang Lasalle / Washington Post