UK capital forecast to attract global talent and capital, boosting long-term demand for office space, according to Aviva Investors research.
business of Aviva plc (‘Aviva’), has today published research identifying 12 European cities it expects will experience the greatest future demand for office space, alongside strong long-term rental growth.
Based on the findings of its proprietary ‘Future City’ methodology, Aviva Investors expects London and Paris to be the best-performing European office markets. With a city’s prospects defined more than ever by knowledge exchange and information sharing, London and Paris are expected be the strongest magnets for global talent; relative to peers, both cities also benefit from superior scale and their status as international hubs, alongside strong governance credentials.
Other cities that scored highly overall include Munich, Dublin, Frankfurt, Lyon, Stuttgart and Hamburg. Aviva Investors also used its analysis to identify four tech cities – Copenhagen, Berlin, Amsterdam and Stockholm – that it is strategically committed to within its real estate investment strategy.
Chris Urwin, Director of Research, Real Assets, at Aviva Investors, said:
“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.
“The tech hubs we have identified are cities with world-renowned clusters in digital and biotech. Most importantly, these locations are highly liveable, which attracts talent and businesses.”
The Future City model created by Aviva Investors uses 30 metrics to assess the credentials of each city; including the ability to attract global talent, cultivate clusters of high value-add economic activities, scale and underlying real estate fundamentals.
Chris Urwin added:
“We have developed this scoring system to identify cities of strategic importance. Concentrating on these 12 hubs for our European office investments will lead to a more focused strategy, which we believe will ultimately lead to improved local expertise and an information advantage that we can use to generate strong investment performance for our clients.”