Moscow commercial real estate has been named the most attractive and desirable in Europe on the 13th LaSalle Investment Management’s European Regional Economic Growth Index.
The Russian capital clinched first place due its size and great growth potential on the list, which contains cities where demand for real estate is likely to be highest in the medium term.
The index includes 326 regions in 33 European countries with previous top-ranking cities, including Paris, Munich and London, dropping down the list.
London takes second, with Munich and Paris stable at 3 and 4, then Istanbul and Luxembourg moving higher.
It was noted the planned expansion of Moscow had inspired investors across Europe.
The economic downturn and rising concerns about government debt in the EU also helped Moscow climb in the rankings.
Jones Lang LaSalle says investment into Russian real estate will reach a record high in 2011, already jumping 80% year on year in the first nine months to $5.25 billion.
The index noted foreign investors contributed 44% of all investment, up from a 14% share a year ago.
It notes the business environment in Moscow still leaves much to be desired.
Moscow made its debut on the LaSalle Investment Management’s European Regional Economic Growth Index in 2009.
After its spectacular entry into the top 10 in 2009, Moscow ranked second in 2010 notwithstanding its challenging business environment.
Claus Thomas, MD LaSalle Investment Management Germany, notes that the annual European Regional Economic Growth Index produced by LiM research, is 60% based on current growth and outlook, 20% on wealth in the local population and 20% on the business environment, including legal aspects, political security and tax considerations.