London retains top spot in LaSalle’s E-REGI index despite Brexit uncertainty
LONDON (October 22, 2018) — London tops index for 10th time since 2000 Index offers evidence that Brexit uncertainty is mainly affecting rest of the UK Strong labour market benefits seven of the thirteen UK cities Paris close rival to London with highest absolute score since launch of the index
Less than six months before Brexit, London remains the leading city for real estate occupier demand in Europe, according to the 19th edition of the European Regional Economic Growth Index (“E-REGI”), published today by LaSalle Investment Management ("LaSalle"), one of the world's leading investment managers in the real estate sector. The UK capital tops the index, an indicator of the European regions and cities with the best economic prospects, for a second successive year, narrowly beating Paris to the top spot of Europe’s 100 largest metropolitan areas. It is the 10th time that London has topped the E-REGI since the index was founded in 2000.
However, the index offered evidence that London’s resilience in the run-up to the UK’s exit from the European Union was not mirrored by the rest of the UK. GDP and employment growth forecasts have been scaled back and the UK’s business environment score fell below the European average for the first time. Last year, Bristol (49th) and Manchester (48th) were the strongest cities in the UK after London, but as both cities saw significant declines in their GDP outlook, they have now been overtaken by Edinburgh (44th) as the second strongest UK city. In fact, the gap between London and second-strongest UK city in the index has never been wider in the index’s 19-year history.
The UK’s principal strength is its exposure to factors that are tied to long-term drivers of productivity as measured through the Human Capital scores in the E-REGI index. London and Edinburgh are leading the pack, but even the weakest UK city in the E-REGI index, Belfast (83th), does relatively well on this metric in a European context. This strong Human Capital position has benefitted the UK labour market overall and the employment scores of seven of the 13 UK cities in the index improved compared to last year. Birmingham (45th) shows the most notable improvement, as the city looks to benefit from an enhanced transport network on the back of a new high-speed rail link to London (HS2) and relocation of some major financial service employers.
Mahdi Mokrane, European Head of Research & Strategy at LaSalle Investment Management, said: “As the E-REGI index shows, the outlook for real estate is very strong across most of Europe. This year’s result emphasises the resilience of London in the face of Brexit. London is a truly global city, attracting talent due to its unique mix of business friendliness and strong human capital. The intelligence we gather from the E-REGI research will enable us to build tailored investment solutions for our clients across Europe during the remainder of this year and into 2019.”
Other highlights of the 2018 LaSalle E-REGI index are:
- Paris ranks in second position with its highest-ever absolute score, combining the strongest score on Human Capital with an improved employment outlook and high wealth.
- Stockholm remains in third position, boosted by a strong wealth score. Other Nordic cities and regions in the top 15 are Oslo (9th), Copenhagen-Malmo (10th) and Helsinki (14th).
- Istanbul, the largest city in the index, retains fourth place in the index, despite the ongoing economic crisis in Turkey.
- Three German cities (Munich, Stuttgart and Berlin) make the top 15, underlining the country’s polycentric set-up compared to the more centralised economies of the likes of the UK and France.
- One of the largest improvers in the index is Warsaw, which rose nine places to 17th at a time of improving growth underpinned by strong consumption.
About LaSalle Investment Management
LaSalle Investment Management, Inc. (together with its global investment advisory affiliates, “LaSalle”) is one of the world’s leading real estate investment managers. LaSalle on a global basis manages approximately $60.5 billion as of Q3 2018 of private and public equity and private debt investments. LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open- and closed-end funds, public securities and entity-level investments. LaSalle Investment Management, Inc. is a wholly-owned, operationally independent subsidiary of Jones Lang LaSalle Incorporated (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit www.lasalle.com.
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