The UK Capital, which came in second place last year, has regained top spot as fears disperse over a hard Brexit, with a softer, longer Brexit now looking more likely, LaSalle said. The city also saw a stronger-than-expected economic performance.
Paris ranked a close second, and was helped to the top of the charts by the landslide victory of president Emmanuel Macron. It also leads the way in terms of human capital.
Stockholm was ranked third, also led by strong human capital scores. Nordic cities generally scored well in the index, with Oslo in eighth place, Copenhagen-Malmö in 10th and Helsinki in 16th.
Surprisingly, Istanbul came in fourth, a reflection of the growth in the city, rather than the current political climate, according to LaSalle. Dublin rose two places to fifth.
According to the index, German cities performed strongly but the “scarcity of labour across all sectors of the economy” means occupier demand has plateaued, with Munich dropping from fourth to seventh.
UK cities also put in a strong performance, with London, Bristol, Edinburgh and Manchester outperforming the European average with regards to human capital.
The improvements were partly attributed to improving university rankings, venture capital investments and a higher number of patents filed.
Mahdi Mokrane, European head of research and strategy at LaSalle Investment Management, said: “LaSalle’s E-REGI index has a proven 18-year track record of guiding investors to those cities offering the best occupier prospects.”
“E-REGI’s long history has helped us identify clear clusters of cities that tend to offer common real estate behaviours. Combined with careful analysis of supply and pricing dynamics this in turn enables us to design superior risk-adjusted strategies for our clients.”