London calling: capital the global lead for private wealth real estate investment

Private investors channelled more of their wealth into London’s commercial real estate (CRE) market than any other city over the last 10 years, according to new data from JLL.

The research, from JLL’s latest Private Wealth Tracker, reveals that some $1.5 trillion of private wealth went into global CRE over the period. The US attracted $604bn from private investors, dwarfing that of the UK in second place ($155bn) and third place Germany ($114bn).

Despite the US being the country that attracted the most investment, London was the pre-eminent city for private wealth investors over the last decade. The capital attracted $87bn between 2013 and 2024 – some $26bn more than second place Hong Kong and $35bn more than third placed New York.

Offices comprised the lion’s share of the investment globally – taking 31% - compared with 24% for living, 19% for retail, 12% for industrial and logistics, and 11% for hotels.

“High-net-worth individuals (HNWIs) are increasingly drawn to CRE because it has performed well over the last 10 years compared to other asset classes and with recent market adjustments there are some compelling opportunities on an absolute price/sq m basis ” Joseph von Maltzahn, Head of Private Wealth EMEA, JLL, said. “The EMEA region is the number one destination for cross border private investment activity capturing over 57% of all capital flows. London is the most popular city globally for private wealth investment, ahead of Hong Kong and New York respectively, with investors buying with strategies ranging from wealth generation to wealth preservation and not forgetting business continuity especially on the retail side. For example, the family owners of Prada have recently bought 150 New Bond Street, which houses the Miu Miu flagship store.”

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

Overall, global investors saw an annual 6.8% return on their investment over the period, eclipsing that of hedge funds (6.2%), emerging markets (6%) and gold (5.3%) but behind global equities (10.6%) and global private equity (11.9%).

“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 in excess of 60% of successful purchases in Europe with JLL in 2023 and 2024.” von Maltzahn said. “With CRE maintaining its appeal as an asset class offering attractive risk-adjusted returns and portfolio stabilization benefits we expect this demand to continue.”

Much of the investment was made through family offices - vehicles set up specifically to invest on behalf of wealthy families - which have grown by 245% since the financial crisis of 2008.