When we first produced this back in 2011, the market recovery was just taking shape: volumes were rising in core cities, New York had reclaimed top spot from London and yield compression was picking up. However, risk was still in the air, and with supply tight, investors were facing some tough choices. Should they accept higher pricing in gateway cities or move on to second-tier markets? With cities being at the forefront of all key questions at this time, we started a new piece of research to focus on which would be the winners of the future. More than just answering this question, however, by taking our analysis down to a city level the study became much more engaging. Indeed, the excitement surrounding the cities themselves started to come through in the research we were undertaking. Over the last five years, we have looked at not just which cities are growing and winning market share but also what drives their appeal to the occupiers and residents that, at the end of the day, create performance. A number of trends have emerged, typically around the themes of greater competition and a need for adaptability in the face of accelerating change. However, one of the most telling themes year after year has been that, while quantity in terms of size and liquidity is crucial for investors, it is not necessarily so for the people actually living and working in the city. For the users, quality is frequently more important – be that the quality of education, infrastructure, institutional integrity or the lifestyle and health the city promotes. We hope that, by raising these issues, we have helped to shape our clients’ thinking on what makes a winning city. Further, we also hope that we have contributed to the debate on how our great cities will evolve and which new competitors will emerge to become even greater cities of the future. For further information or to join the debate, please contact the Cushman & Wakefield Research or Capital Markets teams.

1. WINNING IN GROWTH
CITIES
2015/2016
A Cushman & Wakefield Capital Markets Research Publication

2. Source: Cushman & Wakefield, RCA
$0
$200
$400
$600
$800
$1,000
$1,200
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
6.2%
6.4%
6.6%
6.8%
7.0%
7.2%
7.4%
7.6%
7.8%
8.0%
8.2%
ANNUALVOLUMES(USDBN)ExDEVELOPMENT
PRIMEYIELD–ALLSECTORAVERAGE
Top 25 Cities Rest of Market Global Yields
• In another strong year for global property, volumes rose
16% to $943bn and values continued to push higher.
• The uncertainties of the global economy left their mark,
however, with some investors growing more selective
and in many cases refocussing on the biggest and most
liquid gateway city markets.
• The top 25 cities in fact outpaced the rest of the market
and now hold a 53% market share, with risk aversion,
profit taking and an improved occupier market lying behind
the allure of these cities.
• Global volatility also continues to promote cross border
investment, with foreign buyers raising activity by 21% to
take a 28% overall market share.
• Although North American money dominates these cross
border capital flows, Europe was actually the fastest
growing source of international investment. Asian global
investment also grew strongly; however, this was at a slower
pace and with a focus on a handful of markets led by the
USA.
TRENDS IN THE GLOBAL MARKET
GROWTH CONTINUES, BUT CAPITAL FLOWS ARE EVOLVING

3. THE TOP 50 CITIES FOR INVESTMENT VOLUMES
(EX. DEVELOPMENT SITES) *Compared to previous 12 months. Source: Cushman & Wakefield, Real Capital Analytics
The top 25 cities saw volumes
rise 20.5% compared to 10.8% in
the rest of the market
THE TOP FACTS:
Half of the top cities 50 are in
the Americas
24 are in the US alone
New York outgrew the rest
and saw nearly 8% in global
market share

4. CAPITAL FLOWS
AN INCREASINGLY CROSS-BORDER WORLD FOR CITIES
USA
$66.8 bn
the biggest source of
cross-border capital
globally
London
took 16%
of all cross-border
activity
more than the next 4
markets combined!
Fastest growing cross-border
investment cities?
Singapore
$15.7 bn
2nd biggest source of cross-border
capital globally
(and biggest in Asia Pacific)
Mumbai
was the fastest growing
emerging market target for
cross-border capital
at 240%
San Diego Copenhagen Auckland
Which region was the fastest growing
source of global investment capital?
Europe at 28%

5. SECTOR LEADERS
WHICH CITIES TOP THE TABLES FOR PROPERTY INVESTMENT BY SECTOR?
*Compared to previous 12 months. Source: Cushman & Wakefield, Real Capital Analytics
OFFICE INVESTMENT VOLUMES
RETAIL INVESTMENT VOLUMES
INDUSTRIAL INVESTMENT VOLUMES
DEVELOPMENT SITES INVESTMENT VOLUMES
HOTEL INVESTMENT VOLUMES
MULTIFAMILY RESIDENTIAL INVESTMENT VOLUMES

6. WHAT MAKES A WINNING CITY?

7. While the economic outturn has
disappointed this year, the outlook is for
improved growth into 2016 thanks in
general to better domestic demand and
corporate investment.
David Hutchings, EMEA Investment Strategy
Cushman & Wakefield

8. 3.0%-3.5% 17%Risk Alert Long Cycle
Ahead
LOOKING AHEAD
WHAT’S IN STORE FOR PROPERTY INVESTMENT
Anticipated slow down pushed
back 1-2 years to 2017/18
amidst low inflation, lower-for-
longer interest rates and a
generally slow restart to
development activity (to date)
New era of risk &
opportunity may be
emerging, shaping the
investment landscape and
challenging the existing
patterns of winning cities
Expected global property
investment growth over the
year to mid-2015, reaching
a record high of US$1.1 tn
Forecast economic growth
in major cities during
2015/2016 – outperforming
many national averages

9. Looking ahead, while increased global
uncertainty will continue to affect
investors, corporate confidence is still
generally high and, allied to the changes
in demand being wrought by new living
and working practices, this underpins a
fundamentally robust outlook for good
quality real estate.
Carlo Barel di Sant’Albano
CEO, Global Capital Markets, Cushman & Wakefield

10. CUSHMAN & WAKEFIELD LLP
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London, W1A 3BG
Tel.+44 20 7935 5000
Cushman & Wakefield Copyright 2015. NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, IS MADE TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION
CONTAINED HEREIN, AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS,
CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE,
AND TO ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS
APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY
(OR PROPERTIES) IN QUESTION.
DAVID HUTCHINGS
Head of EMEA Investment Strategy
+44 (0) 20 7152 5029
+44 (0) 7793 808029
david.hutchings@cushwake.com