CHART BOOK Mahdi Mokrane Anne Koeman Sharapova Irène Fossé Chris Psaras SEPTEMBER 2016
E-REGI Methodology 60% Growth E-REGI Score 20% Wealth GDP per Capita current Business Environment Political Stability, Default, Regulatory and Trade Credit Risk, Inclusion in EU/EMU current 15% 22.5% 22.5% LaSalle Human Capital Index Service Employment: 5 year forecast: growth and absolute 3 year historic growth GDP: 5 year forecast: growth and absolute 3 year historic growth 20% The European Regional Economic Growth Index (E-REGI) identifies those regions across Europe with the best economic prospects. As such, E-REGI approximates the relative strength of occupier demand for real estate in the medium term an important source of capital growth. Analysis is carried out for nearly 300 (exact: 295) regions across Europe, covering 32 countries with a total population of more than 730 million. The report focuses on a subset of 100 major cities (metros with 500,000 inhabitants and all national capitals), which feature in the E-REGI ranking When combined with detailed real estate knowledge, supply side information and relative pricing, the E-REGI can be used to determine real estate market outperformance. LaSalle s E-REGI Spezialfonds KAG, open to German institutional investors, uses the index as the base for a research-led strategy. LaSalle Investment Management E-REGI 2016 2
Weak Weak Medium Medium Strong Strong 2016 E-REGI Scores All European Regions (n=295) E-REGI 2016 Scores 0.50 1.50 2.00 Cities with Weak Scores Cities with Strong Scores Paris (1) London (2) Stockholm (3) Munich (4) Luxembourg (5) Istanbul (6) Dublin (7) Madrid (8) Stuttgart (9) Oslo (10) C'hagen-Malmö (11) Zürich (12) Lyon (13) Brussels (14) Barcelona (15) Berlin (16) Helsinki (17) R'dam-Den Haag (18) Amsterdam (19) Warsaw (20) Gothenburg (21) Frankfurt (22) Geneva (23) Toulouse (24) M'heim-K'ruhe (25) Utrecht (26) Vienna (27) Hamburg (28) Bristol (29) Bern (30) Milan (31) Marseilles-Nice (32) Bucharest (33) Bratislava (34) Cologne-Bonn (35) Düsseldorf (36) Antwerp (37) Seville (38) Basel-Mulhouse (39) Budapest (40) Valencia (41) Nantes (42) Bilbao (43) Nuremburg (44) Bordeaux (45) Ankara (46) Prague (47) Bremen (48) Rome (49) Edinburgh (50) Ljubliana (51) Lille (52) Bologna (53) Krakow (54) Hannover (55) Tallin (56) Manchester (57) Poznan (58) Ruhr (59) Leipzig-Dresden (60) Izmir (61) Birmingham (62) Strasbourg (63) N'ham-Derby (64) Katowice (65) Wroclaw (66) Zaragoza (67) Bielefeld (68) Verona-Venice (69) Leeds (70) Vilnius (71) Rouen-Le Havre (72) Lisbon (73) Liège (74) Tricity (Gdansk) (75) Lodz (76) Sofia (77) Saarland (78) Glasgow (79) Florence (80) Riga (81) Turin (82) Antalya (83) Cardiff (84) Liverpool (85) Belfast (86) Sheffield (87) Athens (88) Newcastle (89) Genoa (90) Szczecin (91) Porto (92) Zagreb (93) Palermo (94) Thessaloniki (95) Naples (96) Moscow (97) Yekaterinburg (98) St Petersburg (99) Nizhny Novgorod (100) Cities Regions Only (n=100) E-REGI 2016 Scores 0.50 1.50 2.00 Cities with Medium Scores Other Regions LaSalle Investment Management E-REGI 2016 3
2016 E-REGI Rank 2016 E-REGI Score Y/Y Comparison Scores & Ranks 2.5 Stronger Paris London 2.0 Stockholm Munich Dublin 1.5 Berlin Lyon Bucharest Budapest 1.0 Manchester Other Regions Cities 0.5 Weaker 0.0 0.0 0.5 1.0 1.5 2.0 2.5 2015 E-REGI Score 0 20 Stronger Berlin Bucharest 40 Budapest Nantes 60 80 100 100 Lille Rouen Le Havre Sofia Strasbourg 80 Tallin Antalya Liverpool 60 Riga Vilnius Izmir 40 2015 E-REGI Rank Birmingham Manchester Weaker 20 0 LaSalle Investment Management E-REGI 2016 4
Y/Y Comparison Scores All European Regions (n=295) Change in E-REGI Score, 2016 v 2015-0.5-0.3-0.1 0.1 0.3 0.5 Paris (1) Dublin (7) Budapest (40) Stockholm (3) Munich (4) Lyon (13) Berlin (16) Bucharest (33) R'dam-Den Haag (18) Nantes (42) Luxembourg (5) Lille (52) Brussels (14) Madrid (8) Toulouse (24) Vienna (27) Bordeaux (45) Marseilles-Nice (32) Hamburg (28) Helsinki (17) Amsterdam (19) Valencia (41) Tallin (56) Utrecht (26) Barcelona (15) Sofia (77) Stuttgart (9) Strasbourg (63) Rome (49) Düsseldorf (36) Milan (31) Rouen-Le Havre (72) Frankfurt (22) Bologna (53) Prague (47) Istanbul (6) Bristol (29) Warsaw (20) Saarland (78) Seville (38) Yekaterinburg (98) Ankara (46) Palermo (94) Cologne-Bonn (35) Bremen (48) Bilbao (43) Ruhr (59) M'heim-K'ruhe (25) Liège (74) Edinburgh (50) Lisbon (73) Leipzig-Dresden (60) Florence (80) Basel-Mulhouse (39) Bratislava (34) Ljubliana (51) Hannover (55) Zürich (12) Nizhny Novgorod (100) Krakow (54) Verona-Venice (69) Genoa (90) Bern (30) Wroclaw (66) Antwerp (37) Lodz (76) C'hagen-Malmö (11) Geneva (23) Zaragoza (67) Nuremburg (44) Bielefeld (68) St Petersburg (99) Gothenburg (21) Turin (82) Sheffield (87) Porto (92) Szczecin (91) Belfast (86) Naples (96) Oslo (10) Katowice (65) Tricity (Gdansk) (75) Glasgow (79) Newcastle (89) Athens (88) Poznan (58) Leeds (70) Zagreb (93) N'ham-Derby (64) Thessaloniki (95) Cardiff (84) Liverpool (85) Riga (81) Antalya (83) Vilnius (71) Moscow (97) Izmir (61) Birmingham (62) Manchester (57) London (2) Cities Regions Only (n=100) Change in E-REGI Score, 2016 v 2015-0.50-0.30-0.10 0.10 0.30 0.50 Other Regions (N=195) Cities (n=100) LaSalle Investment Management E-REGI 2016 5
Y/Y Comparison Scores & Ranks R'dam-Den Haag (18) E-REGI 2016 Change in Score Top and Bottom 20 Cities, 2016 v 2015 Paris (1) Dublin (7) Budapest (40) Stockholm (3) Munich (4) Lyon (13) Berlin (16) Bucharest (33) Nantes (42) Luxembourg (5) Lille (52) Brussels (14) Madrid (8) Toulouse (24) Vienna (27) Bordeaux (45) Marseilles-Nice (32) Hamburg (28) Helsinki (17) E-REGI 2016 Change in Rank Top and Bottom 20 Cities, 2016 v 2015 Budapest (40) Lille (52) Bucharest (33) Nantes (42) Berlin (16) Tallin (56) Strasbourg (63) Rouen-Le Havre (72) R'dam-Den Haag (18) Sofia (77) Marseilles-Nice (32) Lyon (13) Hamburg (28) Vienna (27) Rome (49) Bordeaux (45) Saarland (78) Bologna (53) Düsseldorf (36) Dublin (7) Katowice (65) Tricity (Gdansk) (75) Glasgow (79) Newcastle (89) Athens (88) Poznan (58) Leeds (70) Zagreb (93) N'ham-Derby (64) Thessaloniki (95) Cardiff (84) Liverpool (85) Riga (81) Antalya (83) Vilnius (71) Moscow (97) Izmir (61) Birmingham (62) Manchester (57) London (2) -0.50-0.30-0.10 0.10 0.30 0.50 Bern (30) Glasgow (79) Tricity (Gdansk) (75) Katowice (65) Gothenburg (21) Geneva (23) Athens (88) Nuremburg (44) Antwerp (37) Cardiff (84) N'ham-Derby (64) Poznan (58) Leeds (70) Liverpool (85) Antalya (83) Izmir (61) Riga (81) Vilnius (71) Birmingham (62) Manchester (57) -60-40 -20 0 20 40 60 LaSalle Investment Management E-REGI 2016 6
E-REGI 2016 Score Components 2.50 E-REGI 2016 Score Components Top and Bottom 20 Cities 2.00 1.50 0.50-0.50 Growth Score Wealth Score Risk Score 2.50 E-REGI 2016 Score Components All Cities 2.00 1.50 0.50 Top 20 Bottom 20-0.50 Growth Score Wealth Score Risk Score LaSalle Investment Management E-REGI 2016 7
E-REGI 2016 Component Scores 3.50 E-REGI 2016 Growth Score Top and Bottom 20 Cities 3.00 2.50 2.00 1.50 0.50-0.50 Growth Score 3.50 E-REGI 2016 Score Components Top and Bottom 20 Cities 3.00 2.50 2.00 1.50 0.50-0.50 Wealth Score LaSalle Investment Management E-REGI 2016 8
Y/Y Comparison Component Scores 1.20 E-REGI 2016 Change in Growth Score Top and Bottom 20 Cities, 2016 v 2015 0.80 0.40-0.40-0.80 0.15 0.10 0.05-0.05-0.10-0.15-0.20-0.25-0.30-0.35 E-REGI 2016 Change in Wealth Score Top and Bottom 20 Cities, 2016 v 2015 LaSalle Investment Management E-REGI 2016 9
Y/Y Comparison Business Environment Score 1.60 1.40 1.20 0.80 0.60 0.40 0.20-0.20-0.40 E-REGI Business Environment Score All Countries, 2016 and 2015 2015 2016 0.15 E-REGI Change in Business Environment Score All Countries, 2016 v 2015 0.10 0.05-0.05-0.10-0.15 LaSalle Investment Management E-REGI 2016 10
E-REGI 2016 Growth Score Components 3.50 E-REGI 2016 Growth Score Components Top and Bottom 20 Cities 3.00 2.50 2.00 1.50 0.50-0.50 GDP Employment Human Capital 3.50 E-REGI 2016 Growth Score Components All Cities 3.00 2.50 2.00 1.50 0.50-0.50 Top 20 Bottom 20 GDP Employment Human Capital LaSalle Investment Management E-REGI 2016 11
E-REGI 2016 GDP Score & Y/Y Comparison 3.50 E-REGI 2016 GDP Score Top and Bottom 20 Cities 3.00 2.50 2.00 1.50 0.50-0.50 GDP Score 0.60 E-REGI 2016 Change in GDP Score Top and Bottom 20 Cities, 2016 v 2015 0.40 0.20-0.20-0.40-0.60-0.80 - LaSalle Investment Management E-REGI 2016 12
E-REGI 2016 Employment Score & Y/Y Comparison 3.50 3.00 2.50 2.00 1.50 0.50-0.50 E-REGI 2016 Employment score Top and Bottom 20 Cities Employment Score E-REGI 2016 Change in Employment Score Top and Bottom 20 Cities, 2016 v 2015 0.50-0.50 - -1.50-2.00 LaSalle Investment Management E-REGI 2016 13
E-REGI 2016 Human Capital Score & Y/Y Comparison with R&D Score 6.00 5.00 E-REGI 2016 Human Capital Score Top and Bottom 20 Cities 4.00 3.00 2.00 Human Capital 2.50 E-REGI 2016 Change in Human Capital / R&D Score Top and Bottom 20 Cities, 2016 v 2015 2.00 1.50 0.50-0.50 - LaSalle Investment Management E-REGI 2016 14
Growth Score 2016 Employment Score 2016 E-REGI 2016 Component Comparison 2.0 1.5 1.0 0.5 0.0 Other Regions Cities -0.5-0.5 0.0 0.5 1.0 1.5 2.0 GDP Score 2016 2.0 1.5 1.0 0.5 Other Regions Cities 0.0 0.0 0.5 1.0 1.5 2.0 Wealth Score 2016 LaSalle Investment Management E-REGI 2016 15
E-REGI Scores over Time 1.60 E-REGI Average Score Based on 100 Cities, by European Macro Region 1.40 1.20 European average 0.80 0.60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 West North South Central Southeast 1.18 E-REGI Average Score Based on all city regions 1.16 1.14 1.16 1.12 1.10 1.08 1.06 1.06 1.10 1.12 1.11 1.10 1.11 1.12 1.13 1.11 1.09 1.09 1.08 1.08 1.12 1.13 1.04 1.02 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1.04 LaSalle Investment Management E-REGI 2016 16
E-REGI Scores over Time Selected Cities 2.60 E-REGI Total Score Key European Cities 2.40 2.20 2.00 1.80 1.60 1.40 1.20 European average 0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 London Paris Munich Madrid 1.60 E-REGI Total Score Key European Cities 1.40 1.20 European average 0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Frankfurt Manchester Berlin Amsterdam LaSalle Investment Management E-REGI 2016 17
Germany - E-REGI over Time Rank 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Munich 5 5 5 7 6 5 7 2 3 1 3 3 2 4 6 7 4 Stuttgart 8 6 16 24 13 13 11 8 6 9 13 10 7 10 8 9 9 Berlin 19 37 65 71 75 43 38 52 50 64 55 39 46 33 29 35 16 Frankfurt 11 8 13 14 16 17 18 13 12 20 20 17 11 14 13 19 22 M'heim-K'ruhe 38 24 17 28 24 28 29 34 31 24 31 26 42 15 14 22 25 Hamburg 25 20 33 32 33 25 33 37 28 31 24 19 23 21 34 39 28 Cologne-Bonn 24 12 22 26 32 27 27 17 13 30 26 23 14 27 33 30 35 Düsseldorf 49 35 45 48 37 32 32 42 33 34 28 27 32 26 31 42 36 Nuremburg 16 25 30 41 39 36 35 28 30 27 33 25 17 22 21 33 44 Bremen 58 36 49 65 44 50 55 60 47 36 41 37 34 37 43 49 48 Hannover 32 33 46 60 63 54 57 67 58 32 48 43 33 35 44 54 55 Ruhr 47 31 35 40 65 48 45 57 44 59 59 52 44 49 50 63 59 Leipzig-Dresden 50 61 68 50 61 51 51 48 63 49 71 55 78 51 53 65 60 Bielefeld 52 39 34 56 57 61 65 69 57 41 63 68 43 52 60 66 68 Saarland 60 63 72 69 67 69 70 82 72 40 81 72 57 60 75 87 78 Score 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Munich 1.42 1.62 1.57 1.42 1.48 1.50 1.52 1.66 1.73 1.57 1.64 1.60 1.70 1.62 1.60 1.56 1.79 Stuttgart 1.35 1.48 1.34 1.24 1.34 1.37 1.42 1.47 1.50 1.38 1.38 1.45 1.50 1.45 1.55 1.52 1.59 Berlin 1.21 1.10 0.93 0.89 0.90 1.10 1.14 1.08 1.07 0.93 1.04 1.12 1.09 1.17 1.21 1.19 1.41 Frankfurt 1.34 1.42 1.35 1.29 1.30 1.33 1.32 1.33 1.35 1.25 1.28 1.32 1.38 1.35 1.37 1.31 1.36 M'heim-K'ruhe 1.03 1.23 1.34 1.19 1.19 1.20 1.20 1.17 1.19 1.23 1.19 1.22 1.11 1.31 1.31 1.29 1.31 Hamburg 1.14 1.26 1.16 1.14 1.13 1.22 1.18 1.15 1.20 1.12 1.23 1.27 1.28 1.22 1.18 1.18 1.28 Cologne-Bonn 1.15 1.35 1.25 1.22 1.13 1.21 1.23 1.30 1.33 1.13 1.22 1.22 1.34 1.20 1.19 1.20 1.22 Düsseldorf 1.11 1.07 1.04 1.09 1.17 1.18 1.13 1.18 1.10 1.19 1.19 1.18 1.20 1.21 1.16 1.22 Nuremburg 1.24 1.22 1.18 1.07 1.08 1.12 1.15 1.22 1.20 1.22 1.17 1.22 1.30 1.21 1.24 1.20 1.18 Bremen 0.94 1.10 1.04 0.96 1.06 1.04 1.02 1.04 1.08 1.07 1.11 1.12 1.16 1.13 1.12 1.10 1.12 Hannover 1.07 1.13 1.06 0.98 0.96 1.02 1.01 1.01 1.03 1.11 1.06 1.11 1.17 1.15 1.12 1.08 1.08 Ruhr 1.13 1.15 1.09 0.96 1.08 1.08 1.05 1.09 0.94 1.01 1.05 1.10 1.06 1.08 1.04 1.06 Leipzig-Dresden 0.99 0.95 0.90 1.04 0.97 1.03 1.06 1.10 1.01 0.96 1.04 0.92 1.04 1.07 1.03 1.05 Bielefeld 0.97 1.08 1.15 0.99 0.98 0.98 0.99 0.99 1.04 1.02 0.98 0.99 1.11 1.04 1.04 1.03 1.01 Saarland 0.93 0.93 0.86 0.91 0.95 0.96 0.97 0.87 0.92 1.03 0.91 0.97 1.02 0.98 0.94 0.97 LaSalle Investment Management E-REGI 2016 18
Germany - E-REGI over Time 2.00 E-REGI Total Score German Cities 1.80 1.60 1.40 1.20 European average 0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Munich Stuttgart Berlin Nuremburg 1.60 E-REGI Total Score German Cities 1.40 1.20 European average 0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cologne-Bonn Düsseldorf M'heim-K'ruhe Leipzig-Dresden LaSalle Investment Management E-REGI 2016 19
Germany E-REGI Scores Y/Y 2016 2015 LaSalle Investment Management E-REGI 2016 20
Switzerland & Austria - E-REGI over Time 1.60 E-REGI Total Score Alpine Cities 1.40 1.20 European average 0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Zürich Geneva Bern Vienna 0 E-REGI Rank Alpine Cities 10 20 30 40 50 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Zürich Geneva Bern Vienna LaSalle Investment Management E-REGI 2016 21
Switzerland & Austria E-REGI Scores Y/Y 2016 2015 LaSalle Investment Management E-REGI 2016 22
Technical Note E-REGI ( European Regional Economic Growth Index ) was first published by LaSalle Investment Management in 2000 with the aim of identifying those European regions with the greatest economic growth potential over the medium term. The E-REGI analysis is updated annually and published in September. The analysis is undertaken on regions defined by Eurostat. Eurostat has adopted a classification system, the Nomenclature of Territorial Units for Statistics, referred to as NUTS. The E-REGI model uses the NUTS 2 level classification, which is the best equivalent to the Standard Metropolitan Areas (SMAs) in the USA. The E-REGI model presents a weighted overall score based on subscores for 14 variables. For each variable, the model calculates a score based on the region s performance relative to the weighted average of all regions. Thus an average location has a score of unity ( ). The E- REGI ranking sorts the metropolitan regions based on the overall score. Data for the E-REGI model is primarily provided by independent data provider Oxford Economics, which supplies historic data and provides forecasts on NUTS 1, 2 and 3 levels for GDP, service sector employment and population. Oxford Economics also provides the risk scores that underpin the business environment scores. These data are provided at national level. Data for LaSalle s European Human Capital Index is primarily provided by Eurostat (for the variables Tertiary Education Attainment Level, Population density, R&D expenditure as % GDP). The University Ranking score is provided by the Centre for World University Rankings (CWUR). This consulting organisation publishes annually global university ranking based on quality of education, alumni employment, quality of faculty, number of publications, number of publications in renowned journals, citations and number of patents. Data on Patents are provided by the Organisation for Economic Co-operation and Development (OECD), while the data on Venture Capital in to Technology companies is from Thomson Reuters. LaSalle Investment Management E-REGI 2016 23
Contacts For more information Mahdi Mokrane Head of European Strategy London +44 207 852 4605 mahdi.mokrane@lasalle.com Robin Goodchild International Director London +44 207 852 4390 robin.goodchild@lasalle.com Simon Marx Regional Director London +44 207 852 4492 simon.marx@lasalle.com Anne Koeman-Sharapova Director London +44 207 852 4520 anne.koeman@lasalle.com David Baskeyfield Director London +44 207 852 4490 david.baskeyfield@lasalle.com Zuhaib Butt Associate Director London +44 207 852 4066 zuhaib.butt@lasalle.com Irène Fossé Associate London +44 207 852 4004 irene.fosse@lasalle.com Chris Psaras Analyst London +44 207 852 4016 chris.psaras@lasalle.com Simone Caschili Quantitative Research Associate London +44 207 852 4419 simone.caschili@lasalle.com IMPORTANT INFORMATION The E-REGI model is based upon data which LaSalle Research & Strategy believes to be reliable. Whilst every effort has been made to ensure its accuracy and completeness of the data used, we cannot offer any warranty that factual errors may not occur. National statistical offices across Europe continue to make progress in their efforts to improve data comparability and accuracy. As such, economic data are commonly revised many years after events have occurred affecting the part of the model calibrated on historic data. DISCLAIMER This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, and is subject to correction, completion and amendment without notice. This presentation has been prepared without regard to the specific investment objectives, financial situation or particular needs of recipients. No legal or tax advice is provided. Recipients should independently evaluate specific investments. By accepting receipt of this publication, the recipient agrees not to distribute, offer or sell this publication or copies of it and agrees not to make use of the publication other than for its own general information purposes. The views expressed in this presentation represent the opinions of the persons responsible for it as at its date, and should not be construed as guarantees of performance with respect to any investment. LaSalle has taken reasonable care to ensure that the information contained in this presentation has been obtained from reliable sources but no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. LaSalle does not undertake and is under no obligation to update or keep current the information or content contained in this presentation for future events. LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this presentation. Copyright LaSalle Investment Management 2016. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of LaSalle Investment Management. LaSalle Investment Management is authorised and regulated by the Financial Conduct Authority in the UK. LaSalle Investment Management E-REGI 2016 24
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