Cities That Work 2021: London, Stockholm, Berlin top Allianz Real Estate’s 2021 latest European office market ranking

Munich / Paris, 12/01/2021

London, Stockholm and Berlin have been ranked Europe’s top three cities in terms of office sector investment opportunities in Allianz Real Estate’s Cities That Work 2021 report. The study examines 26 top-tier cities in Europe and incorporates 20 proprietary and external indicators which are used to generate structural scores for each city.

“While the world has radically changed since our last report in 2019, it is clear that offices remain vital to the European workforce; fostering collaboration, innovation and maintaining corporate culture,” stated Dr Megan Walters, Global Head of Research at Allianz Real Estate. “Investment opportunities remain in commercial real estate, given the extended elevated spread to real risk-free rates; this will support investor demand alongside occupier demand for major, multicultural  cities such as Stockholm and Berlin and London – truly international hubs with strong structural scores, underpinning our commitment to the region.”

London comes out significantly ahead in the rankings, despite the impact of both Brexit and Covid-19. With excellent scores in each category, it ranks first for both global city status and human capital and is also set to disproportionally benefit from the rise of the tech sector and the predicted falls in prime core office vacancy rates.

Stockholm earns a second overall ranking through top scores in the office market balance, economic strength, human capital, technology & connectivity, and ESG categories. Stockholm’s biggest strength is its office market balance, rated first. Low volatility has resulted in significantly above average risk-adjusted returns over the last 15 years. It also has the second-highest rental growth.

Berlin is the highest-ranked German city, rated above Munich and Frankfurt for the first time by Allianz Real Estate. The most globally connected city in Germany with a rich history and world-class cultural offerings, Berlin has used its open values and accessibility to attract international talent and cultivate a growing tech sector – ranking third for market balance, technology & connectivity, and global city status.


Dr Megan Walters, Global Head of Research at Allianz Real Estate

Dr Megan Walters, Global Head of Research at Allianz Real Estate

Denmark’s capital, Copenhagen, is named as one of the top cities to watch. With the fifth-highest forecast GDP growth, driven by its service and export-oriented economy, its economic strength is also supported by population growth: the city is one of only three scored with expected population growth above 1% a year. The city also has strong service sector growth and a top six ESG ranking.

Dr Megan Walters commented: “With Covid-19 dramatically changing the way people work and accelerating structural trends, significant methodology changes were made from the 2019 and most recent report to reflect a new environment. Growing internal and external ESG awareness is represented in the new ESG category, and technology and connectivity criteria are more sophisticated and carry a heavier weighting.”


Allianz Real Estate - 2021 European office scorecardRank 2021Rank 2019
Top 5 Cities that Work  

Source: Allianz Real Estate - Cities That Work 2021


This year’s ranking was compiled using data across seven categories, including market size; office market balance, i.e., forecasted rental growth combined with low volatility; economic strength; global city status; human capital; technology & connectivity; and ESG, which includes social cohesion, city-level corruption and environmental metrics, to name a few.  

Despite the impact of the pandemic, Allianz Real Estate has continued to invest in the European office sector both through direct equity acquisitions and financing. Key deals over the past 12 months include the EUR 1.4 billion forward purchase of FOUR Tower 1 in Frankfurt, and the first equity office investment in London. On the financing side, the firm has continued to strengthen its pan-European loan book with major office lending transactions in Paris, Amsterdam and London.

As of end of September 2021, the European office sector accounts for the single largest allocation for Allianz Real Estate at EUR 30.5 billion in AUM (out of EUR 41.4 billion in total global office AUM).

The full Cities That Work 2021 report can be found here.  

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