Publications

- April 1, 2018: Vol. 30, Number 4

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Global gateway cities in the past decade

by Jennifer Molloy

Since the global financial crisis, property investors have sought the perceived safety of portfolio diversity and capital growth in global gateway cities, on the premise these economically dynamic and well-connected cities would provide greater liquidity and more stable cash flows than secondary markets, according to MSCI. In its February report, Global Gateway Cities: The Performance Behind the Hype, MSCI asks, “Have these cities, which include London, New York and Tokyo, offered the superior and safer investments to justify their premium pricing?”

In its analysis, MCSI found the office sector in global gateway cities “did not provide superior unadjusted returns over the decade ending 2016, based on annualized total returns.” From 2007 to 2016, for example, 10-year annualized total returns for standing office investments in the global gateway cities of London, Paris, New York City and Tokyo all underperformed “regional gateway cities” (Toronto, Sydney, S

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