People and capital are key to city investment

People and capital must come together if European cities are to attract long-term investment and remain competitive, according to Annelou de Groot, chief executive officer for the Netherlands at Cushman & Wakefield.

Speaking to Real Asset Media at EXPO Real 2025, de Groot said successful city investment strategies depend on aligning capital deployment with social outcomes. “The key takeaways for me is that it’s about two things. It’s about people and capital. And we need to combine both of them,” she said.

She pointed to Cushman & Wakefield’s research into inclusive cities, arguing that investment decisions must go beyond financial metrics alone. “It’s not only around capital, it’s also around being inclusive,” de Groot said. She defined inclusivity as resting on four core pillars: sustainability, diversity, affordability and accessibility.

While challenges vary widely across Europe, de Groot highlighted housing affordability as a shared pressure point. “What we see in general in Europe is that the affordability piece, mainly for housing, is a big challenge,” she said, adding that cities show far greater divergence when it comes to sustainability, accessibility and diversity.

Looking ahead, de Groot said defence spending is set to become a major structural driver of urban development and real estate demand across Europe. “We are just at the start of a huge, huge impact of defence industry in the real estate markets, but also cities in Europe,” she said.

She noted that European countries have committed to allocating around 3.5% of GDP to defence, a shift that will reshape demand patterns. “We will now be more focused on people. We will now be more focused on production, on logistics and on innovation campuses,” she said.

Those priorities, she added, will translate directly into property markets. “These expenditures will also come down to real estate expenditures,” de Groot said.

As European cities adapt to these structural changes, she argued that closer cooperation between the public and private sectors will be essential. “The big thing is to collaborate even more, public parties and private parties, not only to do the defence expenditures, but also to become a better city that combines growth together with sustainability and inclusivity,” she said.