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E_REGI from LaSalle – attractive European investment locations

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Munich and Stuttgart are riding high in the European Regional Economic Growth Index (E-REGI) from LaSalle. Munich has moved up from 7th to 4th place, and Stuttgart is still number 9, while Berlin has risen by 19 places to number 16. The index highlights European regions with the best economic prospects.

This year 11 German cities are ranked highly, and 8 in the top 100 have risen. Frankfurt-am-Main, Mannheim-Karlsruhe and Hamburg nearly made it into the top 20, and the second fastest upstart is Hamburg, which has risen by 11 places to become number 28. This is very different to last year, when most German cities in the E-REGI were sinking.

LaSalle puts the change down to the employment market in Germany. This is showing more potential for growth than formerly expected, so the prospects for German cities have been upgraded. The political analysts at LaSalle believe that policy measures to improve childcare, the raising of retirement age, and the participation of immigrants will be crucial for this growth.

A new indicator in the E-REGI: human capital

LaSalle has included a new indicator of growth in productivity in the E-REGI in the form of human capital. The E-REGI shows that most human capital is pooling in cities, which has led to the upgrading of Berlin, Munich, Hamburg and especially Düsseldorf. Berlin is attracting more venture capital to invest in its technological enterprises than are all other European cities and is swiftly becoming the Internet-based technology capital of Europe.

The spatial concentration of human capital in urban areas makes it easier to swap knowledge

Access to ‘agglomeration benefits’ is one reason why companies are willing to pay high rents for certain locations, according to Mahdi Mokrane, the European head of research & strategy at LaSalle. This should be seen as a corporate investment, just as workers are willing to pay more rent or more for a house, to gain access to companies able to pay higher wages.

In the long run, regions rich in human capital are likely to perform especially well on the property market, so ‘including the human capital component is an important addition to the E-REGI,’ says Mokrane.

Here are the top 20 cities listed:

  1. Paris (plus 1)
  2. London (minus 1)
  3. Stockholm (plus 1)
  4. Munich (plus 3)
  5. Luxembourg (0)
  6. Istanbul (minus 3)
  7. Dublin (plus 5)
  8. Madrid (plus 3)
  9. Stuttgart (0)
  10. Oslo (minus 4)
  11. Copenhagen-Malmö (minus 3)
  12. Zurich (minus 2)
  13. Lyon (plus 11)
  14. Brussels (plus 4)
  15. Barcelona (0)
  16. Berlin (plus 19)
  17. 1Helsinki (plus 4)
  18. Rotterdam-Den Haag (plus 14)
  19. Amsterdam (plus 1)
  20. Warsaw (minus 4)
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