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Global Cities

The benefits of city diversification: a team game

Alice Breheny
Global Head of Research
City diversification - a team game_hero

At Nuveen Real Estate, we believe understanding a city’s personality and its likely drivers of success is vital in achieving benefits of diversification. One of real estate’s roles in a broader investment portfolio is to provide diversification benefits through its weak correlation with other asset classes. Within real estate, diversification is more effectively achieved through geographies rather than just by sector, ultimately a team of cities’ fortunes and future successes depends on a range of different drivers and traits. A successful team is not one where every player is good at the same thing. As the ‘team’ acronym states, together everyone achieves more.

Which cities make up our starting 11?


Using data based on the European office market, we have selected a team of 11 cities as an example investment portfolio likely to achieve benefits of diversification.

Our starting 11

Goalkeeper: Brussels

A goalkeeper plays a pivotal role in the team with the responsibility of being very dependable – a safe pair of hands! Historically, Brussels is a very steady and dependable city and has shown the least volatile investment performance of over 24 European cities analysed. Similar to Thibaut Courtois who kept 38 clean sheets in 74 games for Belgium,1 you depend on your goalkeeper to defend your position and keep you level, if not ahead. 

Full backs: Dublin and Istanbul

Full backs are renowned for getting up and down the pitch, supporting both attack and defence. These positions are well known for players who are youthful and quick with great stamina. Both Dublin and Istanbul are among the most youthful city populations in Europe. A young Turkish full back is Caglar Söyüncü who debuted for the national team aged 19; playing in 24 games he has recorded a rate of 74% successful actions.2 A popular Irish player with great stamina and a good role model for the young up-and-coming players is Seamus Coleman who has a pass accuracy rate of 80%.2

Centre backs: Copenhagen and Vienna

This position combines experience with likeability – also making good captains. Copenhagen and Vienna score very highly on our lifestyle scoring, yet they are not the youngest of populations Both cities have indicated very low performance volatility meaning they can keep a cool head in hot situations where consistency is paramount. They also score very highly on innovation, suiting the centre backs’ demand for creativity in driving the play forward. These traits are consistent with Austrian defender Sebastian Prödl who averages 13 tackles and interceptions per game for his country, and Danish player Line Røddik Hansen who has a pass accuracy rate of 82%.2

Defensive midfield: Barcelona

This position is the key link between the defenders and midfielders. Boasting a high connectivity score, Barcelona’s trait are an example of an effective defensive midfielder, being well connected to other major European hubs.  A great player example is Andrés Iniesta, who had a pass completion rate of 87.8% in the 2018 World Cup.3

Wingers: Amsterdam and Berlin

Typically, these wide positions require flair, creativity and dynamism. Both Amsterdam and Berlin rank very highly on innovation, energy and a strong lifestyle offer which allows them to attract net migration and cities which will likely grow and develop quickly. Professional players with these traits are Lieke Martens (Netherlands) who was named FIFA Women’s Player of the Year in 2017 and Tabea Kemme (Germany) who played in every minute of all but one game in the 2012 Olympic games which Germany went on to win gold.

Attacking midfield: Paris

An attacking midfield player must encompass creativity and great awareness of their surroundings, often finding pockets of space to exploit and linking well with the forwards. Paris has fantastic connectivity with the rest of the world, the second highest ranking of any European city. The city is also one of the first to recover, which is vital for an attacking midfielder in order to protect those behind them. One of the most famous French players, Zinedine Zidane scored 31 goals and had 30 assists across 107 games during his international career.1

Forwards: London and Oslo

An essential name on the team sheet, Central London is typically the first city to recover after a performance downturn - exactly what you want in a forward who is the first line of defence. The city is the most liquid globally, the most innovative in Europe and number one for connectivity. A good forward is creative in front of goal and knows where the net is. A player who represents the city of London is Ellen White, who recently became England Women’s record World Cup scorer. 

Oslo acts like a luxury player, one that can add amazing performances on a good day yet is not always consistent. The city ranks second out of 24 cities for overall investment returns although can be one of the most volatile, and therefore can hit a bad spell of form on the odd occasion. On the pitch, if one striker is having a bad day at the office, the goal-scoring responsibility falls on the shoulders of their teammates. An example of a goal-hungry player with an instinct for the back of the net is Ada Hegerberg, the first-ever recipient of the Women's Ballon d'Or in 2018.

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1 Transfermarkt, 2019
2 Wyscout, 2019
3 WhoScored.com, 2019

This material is provided for informational or educational purposes only and does not constitute a solicitation of any securities in any jurisdiction in which such solicitation is unlawful or to any person to whom it is unlawful. Moreover, it neither constitutes an offer to enter into an investment agreement with the recipient of this document nor an invitation to respond to it by making an offer to enter into an investment agreement. 

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, certain historical performance information of other investment vehicles or composite accounts managed by Nuveen may be included in this material and such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Nuveen to be reliable, and not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Company name is only for explanatory purposes and does not constitute as investment advice and is subject to change. Any investments named within this material may not necessarily be held in any funds/accounts managed by Nuveen. Reliance upon information in this material is at the sole discretion of the reader. Views of the author may not necessarily reflect the view s of Nuveen as a whole or any part thereof. 

Past performance is not a guide to future performance
. Investment involves risk, including loss of principal. The value of investments and the income from them can fall as well as rise and is not guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to fluctuate.

This information does not constitute investment research as defined under MiFID.