London, Tokyo, New York, and Hong Kong top the list of the world's top 30 real estate investment cities.

As world leaders gather in Davos, Switzerland for the World Economic Forum annual meeting to discuss global economic issues, a new study from Jones Lang LaSalle shows that 30 cities account for more than half of all global real estate investment. Sale in Qatar | Property Hunter

London, Tokyo, New York, Hong Kong, and Paris account for a quarter of the overall investment. By the turn of the decade, however, newer destinations like Beijing, Shanghai, Moscow, and Sao Paulo would have become serious contenders for real estate dollars.

According to the study "A New World of Cities,"

In 30 cities around the world, 50 percent of real estate investment is concentrated.

London and Paris are both among the top five cities in the world for real estate investment.

Five Asian cities are among the top ten, up from two in 2004, with China's weight rising through 2020.

Currently, three North American cities are in the top ten. New York, Washington, DC, and Toronto, as well as the six fastest growing cities in the world, are predicted to be in the United States.

As digital communications allow companies to locate outside of traditional hubs, the top 30 cities will become the top 50 by 2020.

"We're already seeing a change in where real estate investors are putting their money," said Peter Roberts, Jones Lang LaSalle's CEO for the Americas. "As investors diversify their portfolios and corporate occupiers broaden their regional footprints to include new cities, the top 30 cities for real estate investment will become the top 50. Advances in digital communications aid this expansion by removing the need for businesses to physically cluster in some of the world's most populous cities."

 

"Over the next decade, Grade A office stock in the BRIC countries is expected to rise by 10% per year," Roberts said. "Of these, China has the most potential, with Chongqing, Tianjin, and Chengdu leading the list of the world's ten fastest growing new cities in terms of GDP."

 

An unparalleled program of growth and modernization is transforming Chinese cities. According to Jones Lang LaSalle, China's secondary and tertiary cities will account for 12% of global economic growth over the next decade. "In 2004, the only Asian cities in the top ten cities for real estate investment were Tokyo and Hong Kong," said Roberts. "However, Tokyo, Hong Kong, Singapore, Shanghai, and Seoul made the list last year."

 

The United States is a solid counter-balance.

While much of the world's attention has been focused on the development of Asian cities, cities in the United States provide a clear counter-balance. Nearly half of the world's office stock is in the United States, and the country accounts for more than a third of all commercial real estate investment. By 2020, eleven of those cities are projected to rank among the top 30 largest cities in the world by GDP. New York, Los Angeles, Chicago, Washington, DC, Dallas, and Houston will be among the top 30 fastest growing cities in terms of absolute GDP.

"North America will have 16 of the top 20 fastest growing mature cities in the next decade," said Roberts. "Technology, high-value practices, and a dedication to creativity will propel Austin, TX and Raleigh-Durham, NC to the top of the list."

 

The European Union (EU)

Despite the turmoil in Europe, London remains the most popular real estate investment destination, with more than $43 billion invested in 2010 and the first three quarters of 2011, a third more than the world's second most popular destination, Tokyo.

"Paris, Moscow, and Istanbul are among Europe's other megacities, in addition to London. They are truly global, with a wide range of industries and sectors to choose from "Christian Ulbrich, CEO EMEA, said. "Other cities, such as Munich and Stockholm, have healthy real estate markets and a strong commitment to innovation, which will help them thrive in a low-growth climate."

"While investors continue to prefer large, secure, and transparent cities, new destinations offer a whole new world of opportunity," Ulbrich said. "The real estate investment map will change in lockstep with the rest of the world. Corporations will continue to evaluate their market positions, look for new opportunities, and expand their global scope. Investors will diversify their portfolios and begin looking for new cities in Asia Pacific and second and third tier cities in the West to invest in."