London figures in the list of world’s most liquid real estate markets along with Japan, New York, Los Angeles and Paris with the global stock of investable assets standing at $27.5 trillion, according to the latest research from CBRE.
After examining the relationship between city market size and capital flows into real estate for 122 cities around the world, CBRE found that there is a high correlation between the size of a city’s real estate stock and the volume of investment into that city.
London is the world’s most liquid market with a global liquidity ratio of 8.6 per cent. CBRE examined the ratio between the market size and the real estate investment inflow to establish the market’s liquidity. From cities with an average turnover of at least $10 billion, London, New York and Dallas mark the top three most liquid markets, with respectively 8.6 per cent, 7.1% and 7.0% of stock traded on a yearly basis.
Tokyo is the world’s largest single market with a total value of investable real estate of $711 billion, followed by New York ($657 billion) and Los Angeles ($482 billion). Paris ($342 billion) and London ($334 billion) are the biggest European markets.
Liquidity is an important consideration for global investors. As such overseas investors represented 94% of all London office transactions in Q3 2017 attracted by the transparent and liquid real estate market in the capital. It is these credentials that provide a significant competitive advantage and are key indicators of successful cities that can compete on the global stage - Chris Brett, Head of International Capital Markets, CBRE UK