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April 12, 2017

Nordic and German cities are proving their resilience in times of recent volatility, with the Norwegian capital, Oslo, leading the world in investment intensity.

JLL’s latest Investment Intensity Index (III) shows one-fifth of the top 30 ranked cities are located across both regions. Other Nordic and German cities in the top 30 are Munich (3rd), Frankfurt (6th), Copenhagen (10th), Stockholm (13th) and Berlin (24th).

Cementing Germany’s strength as an investment destination, three German cities are also ranked in the top 12 for cross-border investment intensity: Frankfurt (3rd), Munich (4th) and Berlin (12th).

The III compares the volume of direct commercial real estate investment in a city over a three-year period relative to its current economic size, providing a measure of market liquidity and a barometer of a city’s overall economic health. It covers 150 cities around the world.

JLL’s Director of Global Research, Jeremy Kelly, says Oslo is a small but highly sought-after market. “Although the city fails to make the premier group of locales for cross-border investment intensity because the market is dominated by domestic players.”

Common drivers are behind the success of the Nordic and German cities, according to Kelly.

“The Nordic and German cities ranked highly on the Index share a number of traits, including high levels of transparency and sustainability, high-quality infrastructure and liveability platforms and robust technology credentials.”

“These ‘future-proofing’ attributes make them well-placed to adapt to changing economic and technological conditions and position them strongly for sustained performance over the long term, helping to underpin their position in the Index.”

Last year Germany came close to surpassing the UK as the world’s second-largest real estate investment market, although the capital – Berlin – lags its sister cities in the ranking.

“Although Berlin comes in behind Munich and Frankfurt on the Index, it remains one of the world’s most intensively invested cities,” Kelly says. “All three cities have registered similar levels of absolute investment over the last three years, which nudges Berlin behind the other two as it has the largest economy of the three.”

“While Frankfurt is a key financial hub and Munich has strong industry ties, Berlin has been drawing strong investor interest with a dynamic technology sector contributing to rising demand, and one of Europe’s strongest office rental growth rates in 2016.”

Click here to view the full Investment Intensity report

Jeremy Kelly
Director, Global Research, JLL

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