Hong Kong receives the most private real estate investment ($789 billion), followed in second place by London, identified as the city with the broadest global reach ($676 billion), a new report says.

Hong Kong receives the most private real estate investment ($789 billion), followed in second place by London, identified as the city with the broadest global reach ($676 billion), a new report says.

The Candy GPS Report, issued by Candy & Candy, Savills World Research and Deutsche Asset & Wealth Management, identifies 12 cities with the potential to show strong residential property growth as they become more fully invested in the next few years.

It also indentifies five cities – Hong Kong, London, Moscow, Singapore and New York – that together grab 40 per cent, or $2.2 trillion, of all global ultra high net worth individual real estate holdings.

Melbourne, Tel-Aviv and Chicago could out-perform the real estate markets in prime world cities in the next few years as global investors seek locations, the survey said.

“For many ultra-high-net-worth-individuals real estate has become a unique asset class, but investment to date has focused on prime property in the top tier world cities which have shown record market growth,” said Nick Candy, chief executive of Candy & Candy.

“Real estate will continue to play an important part in global investment with investors now looking beyond established safe havens and prime world cities,” Candy said.

Yolande Barnes, Director, Savills World Research, who conducted the analysis said: “As prime real estate in many premier cities has become more fully valued, emboldened investors are now spreading their wings and looking for high yielding secondary properties in those cities as well as starting to consider the value of second-tier cities in counties with strengthening economies.

“This more adventurous approach is likely not only to provide higher income returns but also the opportunity for significant capital growth. Real estate values will grow as new cities all over the globe rise on fortune’s wheel. Property rents and values will rise in line with new and growing economic strength,” he added.

Dario Schiraldi, Head of Deutsche Asset & Wealth Management’s Global Client Group, added: “Our UHNW clients are increasingly seeking locations outside the mainstream to broaden their real estate portfolios.”

Three markets – Germany, Japan and the United States – top the list as the global locations with the highest value of direct real estate investment by UNHWIs. Together they account for 39 per cent of all UHNWI global real estate holdings.