JLL’s Investment Intensity Index, which compares the volume of direct real estate investment over a three-year period to the economic size of a city, reveals that four out of the top five cities in the rankings are in Australasia.
Sydney took top spot, followed by Auckland, Melbourne and Brisbane, with Tokyo rounding out the top five.
Hong Kong and Taipei finished in sixth and seventh respectively, while Singapore, Adelaide and Perth secured the last three spots in the top 10.
The index found that Tokyo attracts the highest volume of annual direct real estate investment in the region at US$21.9 billion. However, as a proportion of city GDP, this represents 8.0 per cent as opposed to 13 per cent for Sydney.
“Australia and New Zealand are well represented in our Investment Intensity Index, as they are the most transparent real estate markets in Asia Pacific due to attributes such as good market data availability, fair transaction processes, high standards of regulatory, accounting and corporate governance,” Megan Walters, JLL’s head of research for Asia Pacific capital markets, said.
Myles Huang, JLL’s research director of Asia Pacific capital markets, added that prime office yields in Adelaide, Perth, Auckland and Brisbane ranged between seven and eight per cent – the highest among the top 10 – making these cities highly attractive to investors.
The report also shows that cross-border investment has played a key role in pushing Australasian cities to the top of the table.
“The share of cross-border investment is above the regional average in most cities in Australia, New Zealand, together with Tokyo, as they have few government restrictions relating to foreigners buying assets,” Ms Walters said.