Edinburgh has entered the world’s top five cities on a prestigious global property investment index due to its growing attraction for international investors, boosted by its increasing role in the tech sector, according to a report published today.
Property consultant JLL said that, according to its Investment Intensity Index, which compares the volume of direct real estate investment over three years relative to a city’s present economic size, Edinburgh came fourth, behind only Oslo, London and Munich, in the global top 30. It was also highlighted as one of 21 “new world cities” seen as redefining the investment landscape.
The city centre is unique in its ability to accommodate a variety of different usesAlasdair Humphery
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JLL, which has an office on Conference Square in Edinburgh, also said the report measures real-estate market liquidity and serves as “a useful barometer of a city’s overall ‘health’, highlighting cities that are punching above their weight in terms of attracting real estate investment”.
Alasdair Humphery, lead director of the firm in Scotland, said: “In recent years, Edinburgh has increased its visibility among the overseas investment community, but to break into the top five is a great boon for the city.”
He cited various reasons for its progress in the rankings, adding: “As a mature and transparent market with low levels of development,
Edinburgh is not at risk of over-supply, which can depress growth. Allied to its strong fundamentals is its flexibility in the face of changing markets.
“The city centre is unique in its ability to accommodate a variety of different uses for land or obsolete buildings, which has been true even during tougher economic times.
“Finally, while the capital’s commercial property market has been built on strong financial and professional-services foundation, its recent growth in the tech sector, in particular, has provided it with a springboard to move forward as a ‘new world city’, offering much more value and variety to investors worldwide.”
Edinburgh also came second globally for cross-border investment intensity, behind London and ahead of Frankfurt, Munich and Dublin. Furthermore, it was one of only three cities in the study – with Oslo and Copenhagen – to rank in the top 20 markets for investment intensity in more than two sectors. Edinburgh came top in the index for the hotel category, second in retail and 16th for offices, “reflecting its position as a globally recognised financial, business and leisure destination”.
JLL earlier this year published data on global investment as a proportion of the total amount in Edinburgh’s office market, finding that this showed considerable growth in 2016, growing to 93 per cent of purchases accounted for by overseas investors – equivalent to about £331 million – from 62 per cent in 2015 and 50 per cent the previous year.
The firm also said then that it expected overseas buyers to continue overtaking domestic funds.