London came out on top as Europe’s most attractive city for businesses and employees for second year running, according to Colliers International’s latest European Cities of Influence report.The report reviews and ranks cities based on their occupier attractiveness, availability of talent, and quality of life factors alongside economic output and productivity; Paris, Madrid, Moscow and Birmingham made up the rest of the top five.  

London proves resillient despite Brexit uncertainty

David Hanrahan, co-head, London Agency and Development at Colliers International says, “London has proved its resilience and magnetism as a global hub in the wake of the EU referendum with a diverse spectrum of investors and occupiers identifying the city as the best place in which to conduct their business.“Concerns about a mass post-Brexit exodus from London to the continent have been tapered as the market has rallied, with European businesses close to quadrupling their activity in London last year.“This is indicative of the wider factors at play that influence employees and employers alike, not least, striking the right balance between talent, quality of life, cost and risk.”The report demonstrates that the UK remains a highly desirable destination for capital and occupiers, largely driven by its magnetism as a centre of diverse high-quality service sector talent, which is in turn, is helping to drive economic output and productivity. Other UK cities, which score in the top 10, include Birmingham (fifth), Edinburgh (seventh) and Manchester (10th).

Madrid hits strongest growth

Madrid jumped up the rankings into third place, despite being only eighth in Q1 2017. This is the result of a shift in occupier strength and attractiveness, which has also run hand-in-hand with a significant jump in investment volumes in Madrid over the last year.In 2017 Madrid recorded a 72 per cent increase in acquisitions, making the Spanish capital the third largest investment market in Europe for the first time as investors buy into the significant long-term potential of the city.Peter Leyburn, EMEA director of client services at Colliers International, adds, “Office occupier strength is the engine room for a city economy and as a driver of all other forms of real estate demand: be it retail (and thus logistics), hotels, leisure and residential."Occupational strength will also help drive rental growth and longer-term this is the most important driver of capital value – especially in an environment where yields do not look capable of compressing any further in the vast majority of markets. So this analysis should be a good marker for where investment capital should go.”“Urban transformations and new infrastructure are also very strong drivers of investment growth. Given we are now approaching the peak of the investment cycle in terms of pricing, and thus volumes, the logical evolution of the cycle is to see a redistribution of capital into cities, illustrating a strong basis for occupier growth alongside those with new key infrastructure changes,” says Richard Divall, Head of Cross Border Capital Markets at Colliers International. 

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Read more about the mobility industry in the Winter issue of our magazine 

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