London is the leading ‘dynamic city’ in Europe, according to the Savills IM Dynamic Cities index. The report highlights European cities with solid fundamentals, including strong economic growth, population, technology and wealth trends, which are well placed to take advantage of trends such as urbanisation, the developing knowledge economy and technological change.
Using 60 indicators across 6 subcategories (Innovation, Inspiration, Inclusion, Interconnection, Investment and Infrastructure), the Dynamic Cities index analyses and ranks 130 European cities. The index provides a score for each city out of 100, with the overall score encompassing the balance of performance across all subcategories, taking into account both current and projected data.
London ranks 1st in 4 of the 6 categories and finishes 2nd in the remaining two. The rankings highlight London’s strength and consistency, scoring highly across the board owing to its range of wealth-creating industries, infrastructure investment, population growth forecasts and diversified workforce. As such, the index forecasts that London will remain the leading European city despite short-term turbulence arising from Brexit.
The city is forecast to continue to expand, supported by initiatives such as the ambitious London Infrastructure Plan 2050, which involves more than £1 trillion of investment covering housing, transport, digital infrastructure and basic services. Although London office supply is increasing and the Square Mile is at some short-term risk due to Brexit-related financial services job relocation, strong wealth indicators and healthy population growth forecasts provide it with a strong long-term investment foundation. London has a well-diversified workforce, so the overall impact on employment is expected to be small.
London is not the only UK city featuring prominently: Cambridge (3rd), Edinburgh (9th), Oxford (14th), Bristol (25th), Manchester (27th) and Birmingham (30th) also feature in the top 30.
Irfan Younus, Head of Research, Europe, at Savills IM, commented: “As a large and vibrant capital, London is a major global player and a leading city in the arts, commerce, education, entertainment, fashion, research and tourism. It is a hotbed of talent and it is skillfully retaining it by creating an inclusive and inspirational environment. Judging from the amount of new infrastructure and the diversity of its workforce, the city is well set to weather any short-term Brexit-related storms, too. For property investors, it will continue to provide tremendous opportunities across the retail, industrial and office sectors.”
Rajesh Agrawal, Deputy Mayor for Business, added: “London is a truly global city driven by a culture of openness and diversity. The fundamental strengths of London as a leading place to live and work remain intact despite the Brexit vote. We have some of the best talent and universities, world-class infrastructure and a range of arts and cultural institutions. London remains open to talent, innovation and investment from all over the world and we will continue to be an outward looking, cosmopolitan city.”
Northern European cities dominate the top 10 rankings, with Munich (6th), Dublin (7th), Stockholm (8th), Edinburgh (9th) and Zurich (10th) completing the list. Madrid was the highest-ranked Southern European city, in 11th position, while Barcelona (17th), Rome (32nd), Milan (34th) and Istanbul (39th) feature in the top 40.
The top performing Dynamic Cities have ambitious infrastructure investment projects, fast-growing knowledge networks, high-quality universities, innovative businesses drawing from a global talent pool and strong cultural amenities to help retain that talent. Savills IM Dynamic Cities predicts that all commercial real estate sectors will benefit from these characteristics over the long run: rising employment will help support the office sector, wealth creation will benefit the retail sector and the explosive growth in e-commerce will drive demand for urban logistics and warehouse facilities.