London extends lead in city property ranking

London remains Europe’s top city for real estate occupier demand and has an economic growth outlook surpassing that of any other European city – but only if the UK leaves the European Union with a deal – according to LaSalle Investment Management’s latest European Regional Economic Growth Index. For the past two decades the property investment manager has published the ranking, which scores 300 city regions based on their economic prospects, productivity of the population, wealth and quality of the business environment. London has now held the top spot for three years running and extended its lead over Paris this year. The second-highest placed UK city is Manchester at 33, which overtook Edinburgh at 34. The firm said its ranking assumed that the UK strikes a deal with the EU to leave the bloc by March 2020 and then remains in a customs union for “an extended period”. “Much has changed during the 20-year history of the E-REGI index, but London has always held a spot close to the top of the index, despite numerous economic challenges in the past two decades, from the dotcom crash to the global financial crisis,” said Simon Marx, director of research and strategy at LaSalle. “While the outcome of Brexit will clearly have a significant impact on London’s ranking, the city has showed tremendous resilience over the last two decades and remains unparalleled in Europe in terms of the scale, flexibility and diversity of its workforce and skills base.” Most UK cities in the index improved their positions, with Manchester, Glasgow and Liverpool all rising by more than 15 places. LaSalle’s analysts said the improved outlook for UK cities is largely due to better prospects for service employment. Elsewhere on the continent, Istanbul nudged Stockholm aside to take third place, while Amsterdam rose to its highest ranking since 2006, at 16th. Meanwhile, Dublin fell three places to ninth. LaSalle’s team said the city has peaked in its economic cycle. LaSalle also revealed plans to expand the criteria by which it ranks cities for the index, including factors such as air quality, housing affordability, transport quality, social infrastructure and the presence of innovative industries. The firm’s analysts said the changes would be made to take into account factors not currently captured by the index “that are becoming increasingly important to the success and ultimately real estate performance of cities”. They added: “Factors such as sustainability, urban density, liveability and wellbeing, climate change resilience and accessibility are becoming increasingly important, and data availability enabling the measurement and comparability of these factors across geographies is improving.” To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette