By adjusting for country market averages, Global Gateway Cities were concentrated in the top half of performers. However, we saw a different picture when we adjusted returns for country effects, as national dynamics, including interest rates and general economic conditions, are significant performance drivers. Dissecting returns between capital growth and income, we found Global Gateway Cities in general provided higher capital growth, but lower income returns than Regional Gateway and Nationally Significant Cities. Our analysis found the office sector in Global Gateway Cities did not provide superior unadjusted returns over the decade ending 2016, based on annualized total returns. But have these cities, which include London, New York and Tokyo, offered the superior and safer investments to justify their premium pricing? The conventional wisdom asserts these large, well connected and economically dynamic cities should provide more liquidity and more stable cash flows than those available from secondary markets.

Since the Global Financial Crisis, real estate investors have turned to Global Gateway Cities as a key way to diversify portfolios and to generate capital growth.

Listen to our 7 minute podcast above of an interview with MSCI's Matt Moscardi, Executive Director, Research and Will Robson, Executive Director and Head of Real Estate Applied Research.

Global city performance index