London ranks as Europe’s leading city for projected real-estate occupier demand for the sixth year running in the latest annual edition of the European Cities Growth Index (ECGI), published by LaSalle Investment Management, the global real estate investment manager. Following closely behind, Paris retains its position as one the “Big Two” European cities owing to its position as one of Europe’s key innovation and technology hubs.
While London retains its top position, its ECGI score worsened compared to last year, due to pressures on GDP growth. In 2022, the ECGI score worsened for 57 cities across Europe, the highest number since the Great Financial Crisis.
Polarization between London and UK regional cities also continued to widen in this year’s index.
Conversely, German cities proved to be less volatile in economic crisis and complementary of each other, with four German cities making it into the index’s top 20.
More broadly, since the ECGI’s inception in 2000, only London, Paris and Munich have consistently ranked in the top 10. Moreover, Amsterdam’s inclusion in the list this year comes due to the city’s human capital and employment growth prospects which remain exceptionally strong.
Petra Blazkova, Head of Research & Strategy, Core & Core-Plus Capital, Europe at LaSalle said: “This year’s findings come amidst significant turbulent macroeconomic headwinds for European markets. Despite their rankings and strong fundamentals, several top European cities will continue to face challenges in the coming months.
“That is why this year’s findings and the metrics tracked in the ECGI provide a valuable tool in assessing occupier demand and prospects for real-estate markets as investors look to the property sector for stability amidst a worsening global financial landscape.”
Uwe Rempis, Managing Director and Fund Manager of LaSalle E-REGI, added: “Amidst a challenging market backdrop, real estate remains a critical asset class for investors. Our research shows that whilst many cities across Europe were recovering from the pandemic last year, markets now face twin economic and geopolitical challenges, making it imperative for investors to build a diversified portfolio of assets underpinned by long-term resilience.”