London tops European cities growth index again as Liverpool moves up the ranks
London has held on to its spot at the top of a closely watched index of European cities as other UK destinations move up the ranks.
The capital has once again ranked number one on the 25th edition of the European Cities Growth Index (ECGI), an annual review of demand for property put together by global real estate investment manager LaSalle Investment Management.
While London stood out – ranking first once again – thanks to its outsized expected total employment growth, Paris was close behind and has the highest ‘human capital’ score of any European city.
In the UK, the Manchester-Liverpool conurbation and Bristol rose by 14 and 4 places respectively, to positions 19 and 27, as a result of the projected impact of defence spending.
Elsewhere in Europe, Warsaw moved into the top 10 for the first time since 2010 due to a strong growth outlook, Germany had the most city regions categorized as ‘strong’ and ‘very strong’, at 15, eclipsing the UK’s 12.
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.”
Rising tensions and rising temperatures
Climate change continued to influence the outlook for European real estate markets, La Salle said.
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.