London has overtaken Hong Kong to be ranked second in the latest Schroders Global Cities 30 index, despite economic and political uncertainty in the UK.
The ranking reinforces London’s position as a significant contributor of the UK economy and highlights the UK capital’s attraction as a location for real asset investing.
London remains the highest-positioned European city in the top 30, followed by Paris in 17th place and new joiner Munich in 28th. In 2016, London was ranked eighth before improving to third place in 2017. The reason that London remains resilient is due to positive revisions to employment data which feeds into income growth, a key component of the index.
Los Angeles remained in top spot with Boston and New York making the top five in the Index. The strength in US cities ranking was also underpinned by good employment data: the fall in jobless claims and move to virtual full employment in the US has had a positive impact on the rankings, despite negative headlines around US-China trade relations.
Austin, Texas joined Munich in entering the top 30 for the first time this year, reflecting both cities status as growing knowledge-based economies.
The Schroders Global Cities 30 index is compiled according to a range of factors, including the projected growth of the economy, disposable incomes over the next decade and the size of the population.
Schroders Global Cities top 30
|City||Country||2019 score||2019 rank||2018 score||2018 rank|
|Hong Kong||Hong Kong||8.4||3||8.4||2|
Hugo Machin, Co-Head of Global Real Estate Securities, said:
“We produce the Schroders Global Cities 30 index each year to give us an edge in tracking the most successful cities of the future. We believe certain factors lay the foundations for upcoming economic growth. As investors, an understanding of these trends is an essential part of our process.
“Urbanisation in China continues at a rapid pace. We see the growth in certain Chinese cities as having a meaningful impact on the future of the Global economy. Beijing, Shanghai and Shenzhen will, in our view, draw further away from other cities in China. There is a clear reason for this. The government investment in those three cities results in the formation of Meta-Cities. This creates super-economic hubs allowing the proliferation of ideas and jobs.
“We remain upbeat about London’s prospects. London has unmatched attractions, from green spaces to a vibrant cultural and entertainment scene. People want to live and work there and that means London can attract the world’s most skilled employees. London, like a number of other true Global Cities, remains at the centre of the global economy despite challenges surrounding Brexit.
“Large cities with broad economies rank well in the index, as scale remains an important part of the analysis. Marrying idea generation to the scale of a city is why certain cities score consistently well and why they are attractive for investing in real assets for the long-term.”