Cities that boast one or more leading universities are likely to have a near-60% premium in the capital values of their office stock, according to new research from Savills.
Although the agency acknowledged that “correlation isn’t always causation”, head of life science research Steve Lang said: “The fact that the overwhelming majority of the world’s most valuable office markets are in cities which are also home to the best educational institutes is no coincidence.”
Savills found that office capital values in global cities with a QS Top 200 university are $672 (£539) per sq ft on average, 58% higher than the $425 per sq ft of those without, with the distribution of cities with higher capital values skewed to those that are also home to top-ranked institutions.
“Businesses of all types need to be close to the best talent and much of that comes from these education institutions, so there’s an inherent and considerable value for occupiers to locate nearby, resulting in competition for best-in-class offices and laboratory space pushing up commercial property capital values,” added Lang.
“This causes a virtuous circle of creating ecosystems which students want to be part of, further supporting the university’s growth and performance in the league tables and leading to more prime commercial space being delivered.”
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