Barcelona and Madrid are between the twenty most dynamic European cities. London, Paris, Cambridge, Berlin and Amsterdam are the five major cities with the largest ability to attract and retain talent. These factors which impulse their respective real estate markets according to the Dynamic Cities Index by the real estate investment manager Savills Investment Management.
While Barcelona consolidates itself as an innovation hub and it climbs seven positions with regards to last year, reaching position number fourteen. Madrid maintains itself in the twentieth position.
Barcelona’s achievement within the inclusion category has boosted this improvement. The Catalan capital is especially strong in this category, which analyses the strength of public transport. It also finds itself between the ten best cities for innovation and interconnection, two assets which favour entrepreneurship and gentrification, and it consolidates itself as one of the main centres of innovation in Europe.
The index classifies the European cities that host the most potential for long-term investment in tertiary properties. The analysis which accompanies the index highlighted by the economic strength of the ten main cities, which recorded GDP growth of 70% between 1998 and 2019, against 39% of the 28 EU countries (EU-28). Also, according to Oxford Economics, the levels of employment in the ten main cities during this period increased by 31% against 15% in the 28 Member States.
In comparison to the rest of the European markets in which potential for investment exists, the cities which occupy the ten first classification positions recorded a major increase in total profit for prime holdings in the three tertiary real estate segments (offices, logistics and local establishments).
The “Dynamic Cities” index by Savills IM analyses and classifies 130 European cities in six categories and highlights those with the ability to attract and retain talent, promote innovation and increase productivity. This develops the population and wealth increase which boosts the success of the tertiary real estate markets.
The index predicts that all of the segments will benefit from these characteristics in the long term; the increase in the levels of employment will contribute to the boots in the office sector, the creation of wealth will benefit the retail sector and the meteoric increase of e-commerce will promote the demand for logistics holdings.
London remains at the top in spite of Brexit
This year, the British capital also holds first place in five out of six categories of the classification: Inspiration, Innovation, Investment, Infrastructure and Interconnection. It obtained second place with regards to Inclusion, a category headed by Cambridge.
If the uncertainty related to Brexit has overshadowed London’s future, the continued attraction the city presents for companies and residents is seen in the technology sector. Since the referendum vote in 2016, the main daggers of the technology sector – Apple, Facebook and Google- have approved plans to establish new offices in London.
Also, in 2018 London attracted more international technological professionals than any other city in the Old Continent, according to the study by London & Partners. Its rich cultural offer and numerous cafeterias and parks, as well as some remodelled highlights, generate which is very favourable for the tertiary real estate sector.