The results of a global survey conducted by Investment Property Databank Ltd. are in and a Canadian city was declared the best location for commercial real estate investors in 2011. The London-based firm found that a combination of rental income and higher property values in the city produced a return on investment of 21.6 per cent. The City of Calgary reaped the benefits of a combination of higher prices for oil and a restricted supply of available properties. Cape Town and Sydney also had impressive returns, with 11.2 and 9.9 per cent respectively.
London had the best performance of all European cities with a 6 per cent increase in property values in 2011. In New York, commercial property values were up by 8.6 per cent. London and New York have performed well due to the quality of commercial properties available and the number of good prospective tenants seeking to rent space.
A total of 19 cities, including Montreal, Boston, and Denver, had double-digit returns last year. These levels are likely not sustainable over the long term, according to Investment Property Databank, since they were probably driven by investors looking for a way to profit from local markets where pockets of economic recovery were taking place.
The worst-performing city listed on the survey was Dublin, with a loss of 1.9 per cent. Commercial real estate investors who chose this Irish city during the past decade would have been disappointed with their choice, since they would have only seen a return of 0.6 per cent over the past decade due to the collapse in real estate values. According to the results of the survey, the best-performing cities in the past decade were the South African urban centres of Cape Town and Johannesburg, with returns of 19.4 and 17.3 per cent respectively.
Previous Post
Commercial Airlines Drop Secret Card Charges
