LaSalle E-REGI Index 2017

LaSalle’s annual E-REGI (European Regional Economic Growth Index) identifies the European regions and cities with the best economic growth prospects.

E-REGI therefore approximates the relative strength of future occupier demand for real estate in the medium term. Our analysis covers nearly 300 regions across 32 European countries, with a total population of more than 745 million. Our main focus is on the 100 major city-regions (regions including cities with more than 500,000 inhabitants and all national capitals).

E-REGI attaches a score to each region in Europe based on its medium-term economic growth prospects, its level of wealth and the quality of its business environment – relative to the European average. When combined with detailed real estate knowledge, supply side information and relative pricing, the LaSalle E-REGI index is a valuable tool for determining real estate market outperformance and investment strategy.

This year we have identified four groups of cities across Europe – the Consistent, the Affluent, the Movers and the Aspiring. This is based on the performance of cities over the past 18 years of E-REGI history. These groupings can have major implications for investment strategies across Europe.

Click map below to view the interactive version.

“LaSalle’s E-REGI index has a proven 18-year track record. This long history allows us to draw conclusions on the performance of European cities throughout the cycles which is of interest to long-term investors.”

- Mahdi Mokrane, Head of Research & Strategy - Europe

E-REGI 2017 Video

London is back in 1st position after losing out to Paris last year in the aftermath of the EU referendum. A softer, longer Brexit now appears more likely than a Hard Brexit following the snap General Election (June 2017). Nevertheless, the outlook for London will remain hampered by Brexit uncertainties for the coming years. Almost all UK cities recovered some of the ground lost last year, with Manchester, Birmingham and Cardiff the strongest improvers.

Paris comes a close 2nd this year, after topping the index last year, and continues to lead Europe in terms of its Human Capital score. Political uncertainty has reduced significantly in France with the election of Emmanuel Macron as President (May 2017), and the new government benefits from a large parliamentary majority. The score of Paris is also driven by a high wealth score.

Stockholm remains in 3rd position, boosted by its high level of wealth, strong GDP growth outlook and high Human Capital score. Nordic cities dominate the top of the ranking with Oslo in 8th position, Copenhagen-Malmö 10th and Helsinki 16th due again to strong Human Capital scores.

Istanbul reaches 4th position this year despite the increasing political upheaval damaging the country’s Business Environment score. This ranking reflects the size and exceptional growth potential of the region.

Dublin’s ascent continued; climbing two places to 5th. A cyclical market, boosted by rapid economic growth and a wealthy population, Dublin achieved its highest score since 2001. Conversely, stable Luxembourg ranks 6th and has been in the top ten for the past 13 consecutive years.

German Cities continue to perform very strongly in the index. The German economy has outpaced expectations but is starting to face capacity constraints due to the scarcity of skilled labour across all sectors of the economy. Munich reached 7th position and Frankfurt moved up two places to 19th position. Berlin stands out as strongest improver in Germany reaching 13th position, its highest rank ever, on the back of an improving Human Capital score.

Polish cities fell in the ranking this year as the increasingly autocratic stance of the government weakened Poland’s Business Environment score. The employment growth outlook is also clouded by declining demographics. Despite falling six places to 26th position, Warsaw continues to lead in Central and Eastern Europe. By contrast, Prague moved up by 13 places to 34th position due to stronger growth prospects.

Of all European cities, Athens made the most progress in the ranking, jumping 35 places to 53rd position.

To read more, download the full report below.

Written by Mahdi Mokrane, Carol Hodgson, Anne Koeman-Sharapova, Irène Fossé and Chris Psaras

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