Property investors based in Europe are increasingly looking beyond London and the continent's other gateway cities in order to better their returns, according to LaSalle Investment Management.
The firm says, however, that not every regional city is suitable for investors and returns can disappoint in the medium term if local market fundamentals such as local growth trends, demographic changes and human capital are not factored in at the outset.
LaSalle has ranked Europe’s top 100 cities based on their medium-term growth potential, and the results confirm that Europe’s economy is driven by dynamic urban centres – with London and Paris in first and second position respectively.
The firm praises the 'extraordinary resilience' of such cities, and suggests that due to their deep investment markets, investors are justified in targeting them for a wide range of investment strategies (core through to opportunistic) throughout the market cycle.
Manchester (17th), and Bristol (25th) have both climbed three spots in the European ranking, and Birmingham (37th) two spots.
“Having published this index for 16 years, we now have an unrivalled understanding of the different economic patterns in Europe’s leading cities,” says Mahdi Mokrane, LaSalle Investment Management’s head of research and strategy for Europe.
“The index not only determines which real estate markets are likely to out- or underperform in the medium term, but combined with our on-the-ground expertise we also use the index as a strategic framework to match cities with the most relevant investment styles.”