London drew in $87bn of private wealth investment into its commercial real estate (CRE) market between 2013 and 2024, JLL’s Private Wealth Tracker report has revealed.

This represented a higher CRE private wealth investment than any other city over the decade.

Global CRE private wealth investment totalled $1.5trn during the period, with the UK as a whole attracting $155bn.

The US was the country with the largest amount private investment in CRE at $604bn, while Germany was in third at $114bn.

Although the US was the nation that attracted the most investment, London was the city that drew in the most private investment in CRE, followed by Hong Kong ($61bn) and New York ($35bn).

Offices comprised the largest portion of the investment globally at 31 per cent, followed by 24 per cent for living, 19 per cent for retail, 12 per cent for industrial and logistics, and 11 per cent for hotels.

Of the top 20 cities to attract interest from private wealth investors, nine were in the US, while only three European cities outside of London – Paris ($29bn), Berlin ($16bn), and Munich ($15bn) – made the list.

On average, global private investors saw an annual return of 6.8 per cent on their investment over the period, ahead of hedge funds (6.2 per cent) and emerging markets (6 per cent), but behind global equities (10.6 per cent) and global private equity (11.9 per cent).

JLL noted that much of the investment in CRE was made through family offices, which have grown by 245 per cent since the 2008 financial crisis.

While London was the main city, the EMEA region as a whole also saw “significant private wealth investment” over the past decade, with the region being the top destination for cross-border private investment activity, capturing over 57 per cent of all capital flows.

“High-net-worth individuals (HNWI) are increasingly drawn to CRE because it has performed well over the last 10 years compared to other asset classes and it currently provides some compelling opportunities on an absolute price/sq. m basis,” commented JLL head of private wealth EMEA, Joseph von Maltzahn.

“London investors have buying strategies ranging from wealth generation to wealth preservation, with business continuity also a focus on the retail side.

“The recent market adjustments attributed to rising interest rates have not dampened the appeal of CRE for private investors. We have seen private investors accounting for more than 60 per cent of successful purchases in Europe with JLL in 2023 and 2024.

“With CRE maintaining its appeal as an asset class, offering attractive risk-adjusted returns and portfolio stabilization benefits, we expect this demand to continue.”

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