Innovation is spreading across an ever-wider range of cities globally, intensifying competition for premium real estate

CHICAGO, March 31, 2026 – Innovation is playing out across a more diverse global map than ever before, but a critical shortage of premium, investment-grade real estate is creating a new competitive frontier where quality of place – not just the city – is paramount, according to a new report from JLL. The fourth edition of JLL’s Innovation Geographies report reveals the severity of this supply-demand imbalance.

The analysis finds that only 11% of global office space was built after 2020, leaving a limited pool of the modern, high-quality buildings that are also typically sought after by innovative companies. That number falls to just 9% in the Bay Area and other major global innovation hubs such as Beijing, Boston, New York and Seoul. Acute shortages in cities such as Paris and London have led new-build central business district (CBD) vacancy rates to fall to 0.9% and 1.2%, respectively.

“The geography of innovation has fundamentally changed, with talent and capital dispersing to a wider, more diverse set of cities globally while supply remains constrained in established innovation hubs,” said Travis McCready, Head of Industries, Leasing Advisory at JLL. “For corporations, this shifts the priority from simple expansion to a strategic pursuit of quality. Successfully navigating this new landscape means finding the right balance of assets through optimization and moving up the quality chain in established markets and expansion into more supply-rich and affordable emerging innovation hubs and — most importantly — recognizing the massive opportunity for investors in developing, redeveloping or retrofitting properties to tap  unmet demand.”

While the San Francisco Bay Area remains the dominant hub for innovation and capital, the report finds that growth is accelerating across a broader set of cities. Notable are Reinforcer hubs – a category comprising 18 cities from Austin to Amsterdam to Shanghai – which have seen population inflows that are 3.8 times higher than traditional centers. These emerging markets offer companies across sizes, industries and geographies the opportunity to approach real estate decisions not just by city or workplace, but by the surrounding built environment. At the same time, the commercial real estate market should consider how to maximize sense of place, amenitization and accessibility to stand out and ultimately shape the future of the global innovation map.

"Companies are looking for premium office, lab and research space that reflects their innovative nature and attracts key talent to optimize their presence in globally leading cities while unlocking new opportunities in emerging hubs,” said Phil Ryan, Senior Director, Cities Research at JLL. "The elevation of reinforcer markets and other specialized hubs to a similar status as traditional innovation anchors underscores the importance not only of scale and depth, but also the distinction of industry and lifestyle offerings to attract and retain talent and companies in a competitive global ecosystem."

The report’s findings also illustrate how market bifurcation within cities is putting intense pressure on pricing for premium space across office markets globally. Production-focused hubs such as Hyderabad and Chennai are experiencing an occupancy boom on the back of foreign direct investment, with net gains of more than 13% compared to pre-pandemic levels. This wave of new supply is leading to the affordability gap between market tiers widening dramatically, as prime rents across top-tier core and anchor cities have surged to more than $1,296 per square meter on average, while some emerging markets offer entry points as low as $324.

That pressure is already reshaping development strategy, particularly in supply-constrained markets where regeneration and repositioning are becoming increasingly important to delivering the modern, high-quality space innovative companies want.

The report also identifies where capital may flow next, highlighting untapped investment potential in markets that outperform on innovation metrics relative to current real estate investment volumes. Several Northern European cities stand out in this regard — including Copenhagen, Amsterdam and Frankfurt — signaling clear opportunities for investors looking to capitalize on the next wave of innovation-driven demand.

For more information, download the full Innovation Geographies 2026 report.