European City Sustainability Study 2024

January 24, 2024 7 Minute Read

By Toby Radcliffe Dragana Marina



Climate change is transforming Europe. The efforts to transition to a lower carbon future will change economies and government policy. Emerging weather patterns and climatic hazards will present new physical risks.

Inevitably this will affect real estate. Indeed, climate change is already a critical issue for real estate decision-makers. Nearly 70% of real estate professionals we surveyed cited reducing greenhouse gas emissions as a top organisational goal.

The study

Physical and transition risks directly affect buildings, as well as the societies and economies around them. Understanding the distribution of these risks is critical to making informed decisions about future strategy.

To better understand market resilience to these challenges, CBRE Research assessed more than 40 European markets based on the following criteria:

Combining this extensive data set and augmenting it with proprietary CBRE data on real estate values, refurbishment costs, and certification rates allows an assessment of real estate’s resilience to the effects of climate change in each market. Critically, it highlights the level of risk identified in certain markets and factors where more due diligence may be required.

This study was conducted using as a basis the same methodology developed by CBRE Econometric Advisors for the 2023 North American City Sustainability study, thus giving us a consistent framework for assessing climate risk across Europe and North America.

CBRE Research has identified the following 10 European cities that are best positioned within our sample to withstand the impact on property values from climate risks (listed in alphabetical order, not by their ranking position):

  • Amsterdam
  • Birmingham
  • Gothenburg
  • Helsinki
  • London
  • Manchester
  • Oslo
  • Paris
  • Rotterdam
  • Stockholm

Leading European cities for resiliency and respective emission reduction target years

Source: Individual city Government websites, August 2023

While these 10 cities were found to be most resilient, all cities in our sample contain areas and assets that are resilient to climate risks. It is important to remember that opportunities are abundant beyond the most resilient markets. With the right due diligence, less climate resilient markets can provide rich opportunities for value-add investment in assets on the journey to net zero and adapting to physical hazards.

What do our 10 most resilient cities have in common?

Real estate considerations

Our findings lead to some recommendations for real estate decision-makers seeking to assess climate risk for commercial real estate. Most importantly, while city level risk assessments are a useful tool, understanding the variation of risk within a city is critical. The cities our study identifies as the most resilient contain assets that are vulnerable to climate risks. Likewise, cities identified as more vulnerable contain assets that are resilient and can present significant opportunities for investors and occupiers that carry out the necessary due diligence.

When conducting due diligence, it is essential to pay close attention of the following:

  • Transition cost tends to be lower in relative terms for higher value assets, but that is not always the case. Costs are contingent on building characteristics and can rise significantly for certain heritage buildings or buildings that require structural work
  • Small differences in location can have a large difference on physical risk exposure. For example, in the case of flooding, buildings metres apart can have different risk profiles due to factors such as elevation and whether a building has a basement. Use the most granular climate data available to evaluate risk
  • While adaptation measures may be strong at city and country level, there is no guarantee that individual assets will benefit from this. For example, the benefits of nationally high renewable energy production only have major benefits to building decarbonisation if building heating is electrified. Assess the extent to which buildings are positioned to take advantage of low carbon electricity

Get in touch to find out more

Our study aims to provide real estate decision-makers with valuable insights to evaluate and benchmark climate risks across Europe, helping them unlock the opportunities of the transition to a low carbon future.

Please get in touch with any of the contacts below for more detail on the European study and the individual cities evaluated. For information on CBRE’s parallel study into North American Cities click here.