Dublin is ranked number one out of 71 European cities categorised by a new European index of cities and regions which have the greatest economic growth potential over the short to medium term.
The European Regional Economic Growth Index, or E-REGI, has been developed by the European research teams of Jones Lang LaSalle and LaSalle Investment Management. It is based on an approach used by LaSalle Investment Management in the US to produce a leading indicator of economic strength in 112 metropolitan regions there.
The index covers all regions of the EU and Norway, and looks at cities of more than half a million people as well as national capitals. Its aim is to identify where the greatest potential for economic growth lies and, consequently, where the demand for real estate is likely to be greatest.
On this basis, E-REGI identifies Dublin as the top-ranking European city, ahead of Helsinki, Paris and Stockholm. London and Frankfurt, two of Europe's most important financial centres, are also in the top quartile.
Belfast is well down the list in which Naples and Palermo come at the bottom.
"Europe's economic geography is changing. Some cities are in a good position to gain from these changes, whilst other cities are likely to lose out," the report concludes.
"The results of E-REGI start to throw some light on those likely winners and losers, and provide a means for qualifying the relative strength of real estate demand between markets."
The index will be produced annually by Jones Lang LaSalle and will therefore be a useful tool in measuring the relative economic prospects of the cities included. It uses a mixture of economic growth, wealth and assessments of the business operating environment to determine rankings.
In interpreting the results, the report classes cities into several categories. Dublin and Madrid are described as the high growth cities on the Euro-zone Atlantic "periphery" which are expected to continue to reap the benefits of EMU membership.
"Economic convergence, combined with high levels of foreign direct investment (FDI), is expected to boost economic growth in the two national capitals. Dublin, in particular, is well positioned to benefit, by offering an attractive business environment for production aimed at the EU markets. However, short-term economic turbulence in these economies cannot be discounted."
Also of interest to Irish investors are the rankings of British cities to which many have gone in search of property in recent years. London is by far the strongest English city, followed some distance away by Bristol, Birmingham, Nottingham and Derby. Of the nine English cities ranked, the weakest is Liverpool. In Scotland, Edinburgh is ranked ahead of Glasgow.
In the wider European context, Scandinavia emerges as one of the strongest areas. Helsinki comes second to Dublin and Stockholm. Malmo and Copenhagen are also in the top ten. "This serves to emphasise the emergence of the Nordic region as a major force in advanced telecoms and IT, capitalising on a highly educated workforce and several world-class technology companies," the report says.
Cities and regions are ranked by using a model which measures 15 variables. The main weighting is given to economic growth factors which use overall regional output and market services employment as the principal sources of real estate demand. The model also takes account of the wealth of an area and the attractiveness of the business environment.
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