Aussie cities drop in REIT rank

Sydney and Melbourne have dropped in ranking as “prime” real estate metro investments, according to real estate investment management firm, Heitman.

The annual real estate market ranking this year incorporated longer-term sustainability factors to gain a better sense of how cities were adapting to a changing climate.

While still in the top 10, Sydney dropped to 10th place from seventh, and Melbourne dropped to 19th from 17th in 2019.

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London and New York retained first and second place, respectively, and were followed by Singapore, Paris, and Tokyo.

The firm’s senior managing director and head of global real estate securities, Jerry Ehlinger, said ‘prime’ real estate markets around the global were characterised by strong demand from tenants, owners, and consumers.

“These gateway markets tend to be supply constrained both by high land costs and difficult permitting and planning regimes,” he said.

“As a result, ‘prime’ real estate assets in these markets are consistently in high demand from investor capital from across the globe due to locational advantage, prestige, attractive leases to credit tenants, stable income, and stable or increasing value but can also be difficult to access through direct investment.”

Notably, Amsterdam at seventh, and Frankfurt at ninth enter the top 10 (up four and five spots respectively) thanks to strong sustainability rankings and the impact that Brexit was anticipate to have on continental Europe.

Chinese cities Beijing (ranked 25th) and Shanghai (ranked 23rd) both dropped four and five spots respectively due to the trade dispute between US and China and growing questions regarding the cities’ environmental sustainability.

Heitman Real Estate Securities Group’s Annual Global Prime Securities Strategies Market Rankings 2020

Source: Heitman

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