Global property investment up to US$1.35tn amid a year of uncertainty. ‘Winning in Growth Cities’ report is an annual survey of global commercial real estate investment activity which lists the cities most successful at attracting capital. Get the key highlights from the report.

1. Change at the top?
WINNING IN GROWTH CITIES
2016/2017

2. Capital Markets | Cushman & Wakefield
Trends in the Global Market
Source: Cushman & Wakefield, RCA
$0
$200
$400
$600
$800
$1,000
$1,200
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
ANNUALVOLUMES(USDBN)ExDEVELOPMENT
PRIMEYIELD–ALLSECTORAVERAGE
Top 25 Cities Rest of Market Global Yields• Global property investment rose 0.5% in the
year to June but volumes for income producing
assets fell and the market has clearly paused for
breath after a busy 2015.
• The largest gateway cities have increased their
share of the market, but they too saw volumes
fall in absolute terms.
• Nonetheless, with the scale of change underway
in the macro environment, more investors are
turning to the stable cash flow and inflation
hedging merits of real estate, particularly given
that the occupier fundamentals of the market are
generally holding up well.
• As a result, this market pause looks unlikely to
become a reverse, at least for quality real estate.
• The globalisation of the market has continued
meanwhile with cross border capital gaining
market share. The top five global investors have
been the USA, China, Singapore, Canada and
Qatar.
• Targets for foreign investment have shifted
somewhat, with cross border flows growing
faster in the Americas and Asia than Europe and
the ranking of cities also changing.
Growth slows as capital flows evolve

3. Capital Markets | Cushman & Wakefield
A strong year for US cities
Top Targets for Investment
TOP MARKETS: YEAR to JUNE 2016• The top 25 cities attracted 53% of investment in the year to June
but volumes fell in some, with 10 of the top 25 down.
Nonetheless, market share rose, with overall volumes into the
top 25 down 4.6% versus a 7% drop in the rest of the market.
• The greater appeal of the US has been notable, with its cities
dominating in all sectors and Tier 2 markets also in favour.
Overall, 24 of the 50 fastest growing larger cities were in North
America,18 were in Europe and 8 in Asia.
• In Europe, Tier 1 cities Paris, Amsterdam and Milan are in the
top growth list but Tier 2 cities also feature heavily, led by
Copenhagen, Rome and Helsinki together with regional UK and
German markets. Asian representation in the growth list was led
by Chongqing, Shenzhen, Shanghai and Beijing in China, as
well as Fukuoka, Singapore, Mumbai and Taipei.
• Cross border players meanwhile cut their investment into bigger
cities slightly more than domestic players, as they pursued more
opportunities in Tier 2 cities. The most notable shift has been
London losing its global crown to New York, but a range of other
gateway markets were down, such as Tokyo, Washington and
Frankfurt, due to limited supply and strong local competition.
• By city, 10 of the top 25 cross border targets were in EMEA, 6 in
Asia and 9 in North America and while Asia and America saw
greater global interest, market share still varies significantly, from
16% in the Americas, to 30% in Asia and 47% in Europe.
0.0 50.0 100.0
Melbourne
Philadelphia
Houston
Toronto
San Diego
Amsterdam
Sydney
Berlin
Phoenix
Denver
Shanghai
Seattle
Hong Kong
Atlanta
Miami
Boston
Dallas
Chicago
Washington DC
Tokyo
Paris
San Francisco
London
LA
New York
ANNUALTOJUNE(USDBN)–EXCLUDINGDEVELOPMENT
2015/16
2014/15

4. Capital Markets | Cushman & Wakefield 4
Sustained low interest
rates, expectations of higher
inflation and volatility in all
asset classes underline the
role of real estate in portfolio
diversification. Furthermore,
with changes to society and
business only accelerating,
the importance of the right
property is increasing –
suggesting profit potential will
be enhanced for the best
even as it falls for weaker
property.
Property Performance

5. Capital Markets | Cushman & Wakefield
Americans are the most global investors but Asian capital is closing the gap
International Capital
0
10
20
30
40
50
60
70
80
90
Asia Pacific Europe North
America
Middle East
and Africa
Latin
America
US$bn
June2016
Between regions Within region
Inter and Intra Regional Buyers
0
20
40
60
80
100
120
Americas Europe Asia Pacific MEA
US$bn
YeartoJune
2012 2013 2014 2015 2016
Sources of Cross Border Capital

6. Capital Markets | Cushman & Wakefield
Offices dominate - particularly for foreign buyers
Investment by Sector
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Multi-familly Hotel Industrial Office Retail
June2016
Market Cross Border
Market Share
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Hotels Retail Industrial Offices Multi-family
YeartoJune
Market Cross Border
Growth in Investment 2015/6

7. Capital Markets | Cushman & Wakefield
Similar cities dominate – but US cities above all
Top 10 Targets by Sector
Rank
Yr to June
Retail Office Industrial/
Logistics
Multifamily Hospitality
1
New York New York Los Angeles New York New York
2
Los Angeles London San Francisco Los Angeles London
3
London Paris New York Dallas San Francisco
4
Tokyo Tokyo Chicago Washington DC Los Angeles
5
Chicago Los Angeles Dallas Atlanta Chicago
6
Miami San Francisco Atlanta Denver Tokyo
7
Hong Kong Shanghai Boston Miami Miami
8
San Francisco Boston Hong Kong San Francisco Washington DC
9
Dallas Washington DC Sydney Phoenix Boston
10
Las Vegas Hong Kong Seattle Seattle Paris
Top 10 rank in 5 sectors
Top 10 rank in 3 sectors
Top 10 rank in 1 or 2 sectors

8. Capital Markets | Cushman & Wakefield
Rivals Compared
Markets vying to win at London’s expense?
Market Size Values & Cost Business Environment:
Office
Stock
Real Estate
Inv, ex Dev
Prime
Yield
Cost of living,
Rank 1 is high
Economic
Freedom
High score best
Ease of Doing
Business,
Rank 1 is best
C&W -
Mn sqm
RCA, USD bn, yr
to June
C&W Mercer
Heritage
Foundation
World Bank
London 25.5 39.38 3.25 17 76.4 6
New York 36.8 82.56 4.35 11 75.4 7
Tokyo 24.2 25.5 3.89 5 73.1 34
Paris 20.1 25.74 3.25 44 62.3 27
Berlin 18.3 10.71 3.9 100 74.4 15
Toronto 16.3 8.99 4.5 143 78 14
Brussels 13.3 2.19 5.5 86 68.4 43
Frankfurt 12.1 7.44 4.35 88 74.4 15
Madrid 11.6 5.23 4 105 68.5 33
Dubai 9.3 0.31 7.25 21 72.6 31
Shanghai 8 12.75 5.42 7 52 84
Amsterdam 6 9.26 5 64 74.6 28
Hong Kong 5.5 14.62 2.77 1 88.6 5
Sydney 5.1 10.09 5.34 42 80.3 13
Dublin 3.3 4.21 4.25 47 77.3 17
Singapore 2.1 7.5 3.33 4 87.8 1
We are some way from knowing the likely
form of Brexit but it is clear there will be a
range of contenders to gain from the
process, including those benefitting from
a shift in trade and investment as well as
those seeing demand diverted and
growing in influence as a result.
In particular, the loss of passporting rights
could see a shift of some financial service
functions within Europe.
However, while Brexit has the potential to
change the global hierarchy, given the
relative appeal, skills and sizes of global
cities, gains are likely to be thinly spread,
with no single market winning out.
Indeed, while London lost its role as the
focus for global investors due to Brexit
and high pricing, it nonetheless remains
EMEA’s leading investment target.
London is likely to continue to reinvent
itself, just as it has in the past, and to vie
with New York to be the leading global
city. In fact while London could lose some
European importance, it could become
even more global in the years to come.

9. Capital Markets | Cushman & Wakefield 9
In such a competitive
environment, cities must do
more to attract workers, not
just rely on workers flowing
their way. This means creating
a brand value that young
people identify with, focusing
on health and security more
than at present, keeping pace
with technological change and
making a contribution to
lifestyles.
Changing Cities

10. Capital Markets | Cushman & Wakefield
Longer, Flatter Cycle
Markets awash with liquidity
• Much of the world economy is still flooded with
liquidity via QE and loose policy but with the
interest rate cycle turned in the US, the clock is
ticking louder than some think.
• Policy normalisation and an unwinding of QE
will be very slow but fraught with problems.
• Inflation is set to increase meanwhile, albeit
gradually, while credit conditions are mixed
despite Central Bank action.
– Bullet 2
Global Trends Ahead
Focus on the fundamentals for 2017
Volumes stable
Strong demand thwarted by supply
• In a risk averse market core property owners
are proving reluctant to sell.
• Activity is still expected to increase in H2
however as global liquidity and low interest
rates drive demand.
• Yields globally will be pushed lower and
profit taking and portfolio restructuring will
bring more supply on to the market but will it
be enough to meet demand?
Risk
A new era of risk and opportunity
• Risk will remain elevated and volatility high and
this will drive more demand for core real estate
• Cities need to be connected, mixed-use,
walkable and transit rich. Increasingly,
however, they also need smart design and a
focus on their target audience
• The way property is being used is changing but
supply cycles are failing to keep pace, bringing
opportunities to create and reposition stock
Global Flows
Go global for opportunities.
• The globalisation of the market continues, with
cross border capital gaining market share and
more investment also going into local platforms
• American money dominates but Asian capital is
catching up and all regions are active abroad
• Targets for foreign investment will shift, with
cross border flows growing faster in the
Americas and Asia but Europe still favoured by
the risk averse.
Looking ahead,
we see stabilising
markets but with
ongoing risk and
change, if anything,
accelerating from
technology, the
environment, social
and demographic
pressures.
As a result, occupier
requirements will
continue to evolve and
the relative strengths of
different cities will
change.

11. David Hutchings
Head of EMEA Investment Strategy
+44 (0) 20 7152 5029
+44 (0) 7793 808029
david.hutchings@cushwake.com
CUSHMAN & WAKEFIELD LLP
43/45 Portman Square
London, W1A 3BG
Tel.+44 20 7935 5000