London has lost its number one place as being the most attractive European city for property investment, according to the latest annual European Regional Economic Growth Index report from LaSalle investment. Apparently Moscow now has greater potential.
Even so the report believes that medium-term demand for European property will remain high in major cities that have high levels of wealth such as London, Munich and Paris, but London has fallen to second place due to poor GDP growth and employment growth, while global financial concerns have also impacted the city.
In spite of this London still has a far higher wealth and better business environment that Moscow and is generally a dynamic and mature market. Next year's Olympic Games is predicted to further boost its popularity, creating more jobs and continuing the regeneration in the area.
All in all the outlook for Northern European countries is still considered to be strong, and emerging Eastern European markets are also predicted to do relatively well over the next few years. The picture isn't so rosy for southern European countries that are already deeply in debt.
Moscow rose from 10th place to second place in last year's annual report, before rising to the top spot this year, but LaSalle still thinks many foreign businesses will be deterred from investing due to the negative business environment.
Munich was again rated number three just ahead of Paris due to its good business environment scores and higher growth levels. Germany is also notable for having the most number of cities in the top 20 which is due to its economic strength.
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