The latest City Momentum Index report from real estate services company JLL has named London as the top city in Europe for real estate investment, followed by Dublin and then Paris with Istanbul entering the top 12 for the first time.
The report says that these top cities boast long held strengths in technology, deep talent pools and ambitious urban development plans.
‘The European top 12 identifies those cities where change is occurring most rapidly. Istanbul joins this group for the first time, where, despite geopolitical headwinds, it displays remarkable dynamism. The ranking combines real estate dynamics such as investment, property prices and construction with socio-economic factors,’ said Jeremy Kelly, director of global research at JLL.
‘Istanbul is a city which is taking bold steps to improve its infrastructure and is building a modern real estate portfolio as it grows into its new skin as a global business centre,’ he added.
London also ranks first in the Global top 20 for a second consecutive year as robust economic growth and commercial real estate fundamentals are complemented by initiatives which are transforming the city’s transport and building on its unique strengths as a global education and technology hub.
The report explains that the US$22 billion Crossrail project is the largest transport scheme in Europe, while new university campuses such as the US$1.5 billion campus for Imperial College London in White City, which is being planned as London’s first major research quarter, are establishing new networks between business and education.
The report also points out that short term momentum in Paris has been affected by weak national growth, but it is increasing and it now sits just outside the global top 20. The city scores strongly for long term indicators such as education and innovation, with the largest number of patent applications and biggest high-tech workforce in Europe.
On top of this ambitious plans such as the Grand Paris project, which will add 200 kilometres of new metro lines to the city’s network, will improve citywide connectivity and create a broad range of new opportunities for real estate development, positioning Paris for strong future momentum.
One of the world’s most dynamic emerging world cities is Istanbul which the report says is expected to have the fastest economic growth of any large city in Europe over the next three years, and the city is also developing the long term incubators that will be crucial for its sustained momentum.
Significant transformational projects, including new metro lines, a third bridge over the Bosphorus and a third airport, will increase the city’s connectivity. Istanbul’s Grade A office stock is set to expand by nearly 60% over the next three years as it advances its status as a regional financial and services centre.
While a well-known and established city like London takes the top spots, the current European index is dominated by what are described Europe’s New World Cities with Dublin in second place, Randstad in the Netherlands in fourth place, Munich in fifth, Stockholm in sixth, Copenhagen in sevenths, Berlin eleventh and Barcelona 12th.
The report explains that these smaller, innovation-oriented cities combine strong infrastructure platforms with a high quality of life and resilience against changing economic conditions.
‘Investors are increasingly looking towards long term trends such as demography and technology when making asset allocation decisions, driven by their search for sustainable income,’ said Kelly.
‘Cities such as Stockholm, Berlin and Copenhagen have among Europe’s highest concentrations of high-tech start-ups, strong research systems and are home to many millennials, a testament to the dynamism and long term potential of the continent’s New World Cities,’ he added.
UK cities have maintained their strong position in the list. In addition to London at the top there is Manchester in ninth place and Edinburgh in tenth. Sound economic fundamentals are credited with their success and devolution measures are set to boost further the competitiveness of these two cities, according to JLL.
Outside the top 12, momentum is increasing across the region, with Madrid, Vienna and Brussels showing the greatest improvement globally in their CMI score over the previous year.
