Employment Hot Spots In Mid Size European Cities To Draw Real Estate Investors
– As supply constraints emerge in large prime real estate markets such as London, and rapid re-pricing takes place in recovering markets such as Spain; investors should be considering mid-size European cities for buying.
An analysis has shown that there are many cities where investors can capitalise on growing employment and economic fundamentals outside of cyclical recovery stories and established office markets.
These are midsize cities, with a minimum office-based employment base of 90,000, where extensive data around the property markets may not be available in the way it is in prime markets, but all have shown:
• Employment growth over the past 15 years with an extra weighting given to growth across the recession (2009 – 2013)
• A concentration of economic activity in sectors that are expected to expand in the future – particularly knowledge intensive service and high-tech manufacturing industries.
The top five cities under this analysis are:
1. Bologna, Italy
2. Malaga, Spain
3. Edinburgh, UK
4. Nuremberg, Germany
5. M25 North and Cambridge, UK
Dr. Neil Blake, Head of EMEA Research, CBRE, commented:
“This list will be a surprise to some; particularly because there are cities in economically ravaged countries where employment actually grew throughout the recession. The economies and office markets in these cities also have the right mix for future growth as they have fostered which we expect to grow, particularly technology and creative industry clusters and university spin-offs.”
“Many investors are now seeking new markets to invest in and we believe that these employment hotspots offer sound opportunities outside of the congested and rapidly re-pricing core markets.”
Investors in to these markets will need to be able to accept some risks and specific due diligence will need to be carried out on local property markets, warns CBRE. However for those with the remit, mid-range markets with improving occupier bases offer an opportunity strong to capitalise on stronger returns than can be found in mature and swiftly recovering markets.
Dr. Blake added:
“Interestingly, many of these cities also have very reputable universities and attractive historic cores – a combination that appears to be conducive both to attracting employers, workers and to producing university spin-offs.”