London has retained its position at the pinnacle of a highly regarded index of European cities, while other UK locations have climbed the ranks.
The capital has once again secured the top spot in the 25th edition of the European Cities Growth Index (ECGI), an annual assessment of property demand compiled by global real estate investment manager LaSalle Investment Management.
London topped the table due to its anticipated significant total employment growth, with Paris trailing closely behind, boasting the highest ‘human capital’ score of any European city.
Within the UK, both the Manchester-Liverpool conurbation and Bristol ascended by 14 and 4 places respectively, landing at positions 19 and 27, driven by the projected impact of defence spending.
In the wider European context, Warsaw broke into the top 10 for the first time since 2010 on the back of a robust growth outlook, while Germany led the pack with the most city regions categorised as ‘strong’ and ‘very strong’, at 15, surpassing the UK’s 12, as reported by City AM.
Dan Mahoney, Europe Head of Research and Strategy at LaSalle, said: “With growing geopolitical tensions, European governments are allocating greater spending for defence, which is expected to create winners in those city regions that have traditionally been the home of military production sites.”
Climate change continued to shape the future of European real estate markets, according to La Salle.
Incorporating climate risk and energy security in its metrics, the index found that the increase in extreme heat days and wildfire is expected to acutely impact southern parts of Europe. .
Madrid, however, remained in eighth place in this year’s ECGI ranking, helped by the major economic tailwind of some of Europe’s lowest electricity prices due to solar power, as well as a strong GDP and job growth path.
“Defence spending and climate adaptation are poised to shape Europe’s urban hierarchy as never before, and it’s crucial to incorporate these factors alongside traditional drivers of real estate demand in any city economic league table,” Mahoney said.
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