II. How does the PATRIZIA Living Cities Index work?

To create the Living Cities Index, we analyse the demographic and economic aspects of cities, allowing us to leverage the current urbanisation megatrend – a general phenomenon of increasing residential transactions – with country-specific characteristics. We look at population forecast, unemployment rate, and gross domestic product (GDP). We also look at a city’s innovation capacity, including student population and patent application numbers, which can tell us how powerful these cities could be.

Once we have examined these subfactors and weighted the data accordingly, we can then determine a city’s long-term attractiveness. We do this through our third-generation approach that scans the internet and compresses unstructured data from over 100 multiple listing systems (MLS’s), compressing it into a cloud-based solution which we call Geo Big Data Analytics. The PATRIZIA Geo Big Data solution currently contains over 50 million relevant observation points, giving us incredibly granular insights. And this allows us to carefully structure the way we invest, helping investors diversify their portfolios by location and risk profile, identifying target cities and investments according to risk-return requirements.