Berlin takes one of the top spots in Savills’ Resilient Cities Index 2022
By Sara Seddon Kilbinger, Senior Reporter, REFIRE
Berlin is one the best performing cities in Savills’ Resilient Cities Index 2022 published this month, up 7 places to 7th place, one of just three European cities in the current top 20, along with London (2nd) and Paris (11th).
“Berlin continues to prove itself as a magnet for German and international companies,’ said Matthias Pink, head of research at Savills Germany. “We see companies increasingly relocating to the capital to benefit from the innovation dynamics and the large talent pool.”
New York retained the top spot, followed by London. LA moved up one spot to third place, replacing Tokyo, which dropped to 5th place.
As the pandemic loosens its hold, urban life is picking up again, allowing world cities to reaffirm their key role as future-proof business locations. As part of the Savills Impacts publication series, 500 cities around the world were analysed across four key areas: the economy, knowledge economy and technology, ESG and real estate.
“The economic strength of the world's largest cities, combined with their talent base and technology sector, create a virtuous cycle that attracts real estate investment and helps keep New York, London, San Francisco and Tokyo at the top of the index,” said Paul Tostevin, director at Savills World Research. “But many smaller cities are catching up, attracting both talent and investment based on their individual strengths,” he added.
Life sciences and tech sector boosting resilient cities
Fast-growing industries such as life sciences and the technology sector are also helping to boost cities outside the Top 20, such as Eindhoven, Copenhagen and Toronto, in the knowledge economy and technology sectors and making them more attractive locations. Toronto and Copenhagen also perform very well in terms of ESG, according to Savills.
“Even though the total population of the top 10 cities in the ESG category is less than seven million and they are all concentrated in Scandinavia, Austria and Canada, these cities offer a blueprint for a new way of working and living that could become increasingly attractive to location-flexible professionals,” Tostevin said. “This increases the demand for real estate, which in turn attracts investment.”
In terms of the volume of investment in both the residential and commercial real estate markets, LA secures the top position, followed by New York and Dallas. Berlin ranks ahead of London, making it the most invested city for real estate in Europe for the first time. Cities from the Asia-Pacific region such as Seoul, Singapore, Sydney and Shanghai do well in the overall ranking, but only occupy places outside the top 10 for real estate investment.
“Overall, cities saw record volumes of real estate investment last year at US$1.3 trillion, up 59% on 2020 and 22% on 2019,” said Rasheed Hassan, head of Global Cross Border Investment at Savills. “With volumes returning to, and in some cases exceeding, pre-pandemic levels, the combination of falling yields and increased financing costs means some investors are having to look beyond their traditional sectors and regions for prime - preferably inflation-proof - returns. In search of higher returns, some may increasingly look to cities that rank in the middle of the Resilient Cities Index,” he added.
The Grounds Real acquires 51% stake in project development in Blankenfelde, Berlin
Interest in Berlin shows no sign of abating. Today (9 June), The Grounds Real Estate Development AG announced that it has acquired a 51% stake in a project development in Blankenfelde in south Berlin from Deutsche Habitat GmbH, who will be a joint venture partner on the project. Around €100 million will be invested to build 186 three-story residential units totaling around 32,000 square metres. Construction is scheduled to begin in the fourth quarter of 2022, with completion expected in the first quarter of 2024.
“Above all, the proximity to Berlin Brandenburg Airport, the transport links and the existing infrastructure speak in favour of the purchase of the building plot,” said Arndt Krienen, managing director of The Grounds. “The purchase is an important milestone for our further growth. We are seamlessly continuing our strategy of implementing residential project developments in attractive locations in the surrounding area of Berlin, following the sale of 34 semi-detached houses in Erkner at the beginning of the year.”