Capital flow and real estate office markets in global financial cities

Student thesis: Doctoral Thesis


The increase in global uncertainties in recent years highlights the need for more insights on the behaviour of international real estate capital flows particularly to assess the extent to which real estate investment, especially cross-border flows, is concentrated in prime locations. Furthermore, it is considered that investor sentiment towards prime locations is enhanced in periods of crisis and uncertainty, for example, the 2007 Global Financial Crisis (Haran et al., 2016, Lizieri and Pain, 2013).

The focus of this thesis, on the identification and evaluation of the major factors influencing global real estate capital flows, is addressed with specific reference to investment in CBD office markets in London, New York and Tokyo. The research assesses real estate as a financial asset within the overall concept of investment theory and evaluates the interaction with the global economy. This is achieved through the identification of the major cities and evaluation of investment flows into CBD office markets through an analysis of Real Capital Analytics data over the period 2007-2017. The research confirms that real estate investments in the selected global cities are highly sensitive to the repercussions of major global events with both the source of investment flows by country and investor type varying over the study period. The analysis indicates that London is more global in character with greater reliance on external cross-border investment than New York and Tokyo. The research highlights the long-run and short-run influence of the exchange rate in the London CBD office market showing that several global factors namely global liquidity, US stock market capitalisation, Tokyo yield spread, and performance of the global bond market affect cross-border real estate investment in this market.

The significance of the study emanates from the specific focus on office markets in global financial cities. This research in the first attempt to rigorously and empirically assess the patterns and changing dynamics of real estate capital flows into office markets in the three major global cities. Specific focus is placed on the cross-border capital flows and sources in terms of country of origin and investor type during major global and national crisis or events.

Given the significance of CBD offices as an institutional asset class, this empirically validated research enables a more informed and critical understanding of the impact of the major global and national crisis on real estate capital flows, linkages between these office markets as well as highlighting the influence of the international environment on cross-border investments in the London CBD office market.
Date of AwardJun 2019
Original languageEnglish
SupervisorJim Berry (Supervisor), Stanley Mc Greal (Supervisor) & Michael McCord (Supervisor)


  • Global cities
  • Globalisation
  • Office markets
  • Cross-border investment
  • Cointegration
  • Granger causality

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