The 12 cities are:
There are 800 cities in the EU, including over 100 with a population of over a quarter of a million. Selecting these cities for office investments is a very focused strategy, says Aviva Investors.
Chris Urwin, Director of Research, Real Assets, at Aviva Investors, explains:
“While some cities do seem well placed to drive growth in an era of knowledge capitalism, they offer limited opportunities for office investors, either because they are small markets – such as Oslo or Helsinki – or because there are very few barriers to entry, as is the case in Warsaw. Each of the 12 cities we have identified for office investment have either significant barriers to entry or have specific submarkets in which supply risks are low.
“More notable, perhaps, is the exclusion of some major European cities including, for example, Madrid and Milan. While both cities are very established office markets, neither city looks particularly well placed to succeed as knowledge economies. The overall educational attainment levels of both cities compare unfavourably with northern Europe.
“Emigration of young talent is a key concern in both Spain and Italy, undermining their talent credentials. Furthermore, Madrid’s working age population is set to gradually decline in the years ahead, while Milan’s prospects are hindered by relatively high long-term macroeconomic risks in Italy.
“Excluding such cities demonstrates our conviction in assessing which cities have what it takes to drive growth in the years ahead. But more importantly, it makes clear our commitment to a focused approach. Focus generates local expertise. And local expertise gives us an information advantage in these 12 cities of the future.
“The role of the city has changed drastically and, whilst location matters no less than it did 50 years ago, being a conduit for knowledge exchange and ideas creation will define a city’s success going forward. Cities today need three key characteristics – talent, clusters and scale – to thrive. As a global leader in attracting and nurturing talent, alongside its established clusters of financial and professional services, London is positioned strongly across several key metrics in our analysis.”