Global Cities Barometer (October 2025)

The UN Trade and Development Agency calculates that global FDI declined for a second consecutive year in 2024, with technology and digital economy sectors receiving the greatest share of venture funding that did take place. New regulations from national governments on investment flows, primarily to advance domestic economic and national security policy agendas, have constrained outbound capital investment, particularly in the USA and in the European Union where overall FDI across the bloc fell by 5% to a nine-year low in 2024. In Q1 2025, all five global cities recorded a decline in the number of FDI projects they attracted. Q2 2025 has also been comparatively disappointing for investment. Global financial challenges and uncertainty associated with US policy on trade and investment have created a much more volatile investment environment.

In comparative terms, London remains the most attractive market for FDI, outpacing the rest of western Europe with a small rise in projects in 2024 of 1.9%. Data from FDI Markets – provided by London & Partners – shows this trend of growth continuing through 2025 (attracting more than twice the number of projects invested into Paris). As Europe’s leading destination for FDI, the potential for London to build on this opportunity is clear, with more than 20,000 jobs created by 2025’s projects in the capital. This is equivalent to a quarter of all FDI jobs in the UK and reflects a significant, competitive strength for the UK capital.

Capital investment into European cities has been impacted by high energy prices and ongoing geopolitical risk from US tariffs and global conflicts. In Q1 2025, Paris experienced its worst performing quarter since records began attracting just 28 new FDI projects. While this increased to 41 project investments in Q2 2025, Paris’s attractiveness for FDI markets remains subdued. Q1 2025 also marked Berlin’s worst performing quarter with just 15 projects. Policymakers, at city, national and EU level, are intensifying efforts to attract new FDI in high-growth and strategic sectors through new strategies such as the London Growth Plan, the €634bn-strong ‘Made in Germany’ investment group, and New York City Economic Development Group’s new sustainable bioeconomy programme.

New York is also underperforming compared to historical levels of FDI, attracting just 35 projects in Q2 2025. The introduction of tariffs under the second Trump administration may have contributed to New York’s FDI projects falling by a third between (Q2) 2024 and 2025 to the lowest level since 2020. However, there is evidence that many corporates are (at least talking) about making extra investment into the United States.  It is yet to be seen if New York will benefit accordingly.  Hong Kong’s FDI projects have gathered momentum, doubling from a record low of 17 FDI projects in Q4 2021 to 35 in Q2 2025.

With the immediate recovery in employment following Covid-19 now past, the pandemic’s residual effects on unemployment are a challenge for policymakers and employers alike. London’s post-pandemic unemployment low of 3.8% in Q4 2023 has since settled at around 6.2%, the highest quarterly rate for four years. A weakened jobs market, hiring freezes and a continuing challenge of high economic inactivity have left the city as the poorest performing region in the UK for out-of-work adults. This is especially visible in London’s more deprived neighbourhoods.

In Paris and Berlin, continued challenges caused by the war in Ukraine, an energy crisis and trade disputes with the US, have arguably unsettled job markets. Berlin unemployment resurged to over 10% in Q2 2025. There are now over three million people unemployed in Germany. Elsewhere, Hong Kong posted its highest jobless rate for over two years at 3.6%. The resilience of New York’s finance, technology and services base has perhaps enabled the city to see unemployment decline in 2025 despite the national job market slowing in 2024.

London continues its leadership over comparator global cities on beating back the post-pandemic flight from the office, with vacancy rates in central London hovering around 6.9%. The City submarket remains robust, with leasing activity up 12% at the H1 2025 point and rent increases of 7.3%. The West End continues to dominate the capital’s high-end office market, building on an exemplary 2024. West End rents look set to end 2025 with the highest growth rate of our comparator cities. Concerns over the decline of the UK’s second financial district at Canary Wharf are being allayed by news of HSBC’s new lease announced for 40 Bank Street: perhaps reflecting a shift in post-pandemic sentiment.

Manhattan continues to experience the highest office vacancy rate of our comparator cities. But the trend since 2023 indicates that this may now have peaked at 23.6% (Q2 2024) in part driven by increased leasing activity. The figure for Q1 2025 is 22.6%. Cushman & Wakefield posits that Manhattan’s office leasing market at the end of Q2 2025 was the best since the end of 2019, with 4.7 million sq ft of lease renewals and a 47.2% year-on-year increase in renewal deals. The decline in rent prices experienced in 2023 for Manhattan also appear to be stabilising.

There are signs of a similar reversal of fortune in Hong Kong as the city’s office vacancy rate appears to be slowing and rent price growth reversing from its Q3 2024 decline of over 10%. News of Jane Street’s record $1.83 billion ($3.9 m a month) leasing deal at New Central Harbourfront, and property group New World’s $11 billion debt deal, has buoyed the market. A slate of new private credit firms are eyeing up major investment opportunities for Asia’s biggest financial centre. This optimism may be further boosted by Hong Kong Chief Executive John Lee’s annual Policy Address for 2025, which emphasised a more bold, strategic growth agenda for urban renewal in the city. Phased development of new commercial buildings in the Northern Metropolis, along with commitments to relax planning regulations, could incentivise investment in the city’s education and commercial sectors.

Elsewhere, Paris and Berlin are showing continued growth in office vacancy rates. Poor performance and a lack of major activity in the French capital led to Goldman Sachs advising a sale of stocks in French real estate investor Icade in a blow to the market. However, Blackstone’s recent $819 million trophy deal for 440,000 square feet of space in Paris’s Trocadero district and the Paris office market posting a 11.2% quarterly increase in rents in Q2 2025 may temper any post-summer worries. Despite headwinds, Berlin’s outlook looks more positive due to an increase in leasing, stable rents and new corporate tax relief.

The tourist markets of London, Paris and New York have driven airport passenger numbers back to their pre-pandemic levels building on high demand in 2024 for international travel. For London terminals, passenger numbers hover close to 100% of pre-pandemic totals. Buoyant demand comes as expansion plans of Heathrow, Gatwick, Stansted and Luton airports are (yet again) being brought forward. UK-wide aviation has experienced a major recovery since 2020-21 with passenger numbers in 2025 set to exceed the 295 million people who travelled from UK airports in 2024.

In Paris, a summer of tennis, rugby and football contributed to the city’s airports handling over 10 million passengers in July alone. More than 13 million people travelled through airports serving New York. Unlike London and Paris, New York’s largest passenger market is not international travel; just over 60% of July demand is for domestic flights. Hong Kong and Berlin passenger numbers ended July 2025 at 77% and 71% of pre-Covid benchmark levels respectively.

Unlike our comparator nations, inflation in the UK is rising; it reached 4.1% (including housing) in the twelve months to August 2025. The UK Government (and Bank) will be keenly observing further changes ahead of the November 2025 Budget. Higher inflation has already weakened consumer confidence and prompted the Bank of England’s Monetary Policy Committee to hold off on cutting interest rates.

In the US, the rate of decline in the rate of inflation from its highpoint of 9.1% in mid-2022 appears to have slowed with August’s figures actually showing a month-on-month increase to 2.9% up from 2.7% on the previous month.

For both Paris and Berlin, the relative stability of the Euro against other currencies has protected them from major changes in inflation, despite a challenging global economic environment. These challenges have only marginally affected Hong Kong which posted a significant decrease in inflation in August 2025 to 0.1% (from 0.6%); the lowest rate in our comparator cities.

Five years since the Covid-19 lockdowns caused cities’ culture, recreation and experience economies to buckle, Airbnb lettings appear to have settled across our five cities at around 65-75% occupancy. In 2024, the major tourist destinations of London, Paris and New York experienced average peak season (May-September) occupancy rates of 67%, 63% and 74% respectively, with rates for 2025 likely to mirror this. Compared to findings from CBRE and JLL, these rates are also considerably lower than annual outlook for 2025 for the conventional hotel market in Asia-Pacific, US and European submarkets, suggesting that global investment trends into the experience economy, alongside moves towards greater regulation of short-term lettings, are affecting Airbnb occupancy.

For London, both Tube and bus ridership sits around 87-88% of pre-pandemic usage.^[1] New York’s Subway reached its highest recorded post-pandemic ridership in Q2 2025; 75% when compared to the same quarter in 2019. In our previous edition, we noted that Paris would close 2024 with rail usage figures exceeding its pre-pandemic performance and did indeed close the calendar year with ridership in Q4 at 122% of pre-pandemic ridership levels. In Hong Kong, following strong performance in 2024, demand in 2025 in Q2 is at 93% of pre-pandemic levels. For the cities where we have data, bus ridership has been generally stable but remains below pre-pandemic ridership numbers.[1] As this data includes usage figures for some but not all Elizabeth line journeys, measuring peak time entries and exits, it should be stated that the Government’s operational metric for comparison is not totally accurate to current travel trends.

As in our previous editions, growth in the electric vehicle (EV) market continues with all four of our comparator cities posting higher quarterly averages of registered EVs per 1,000 people. Between Q1 2021 and Q1 2023, the number of EVs in London tripled from 3.1 to 9.4 per 1,000 Londoners. This growth rate has since slowed. Between Q1 2023 and Q1 2025, EV ownership grew from 9.4 to 17 vehicles. While investment into EV charging infrastructure is growing, both in new homes and on-street locations, coverage remains patchy, especially in west London where the energy grid infrastructure is facing constraints. Berlin, Hong Kong and New York’s rate of ownership growth remained just about in positive territory.

Following an update to our dataset’s methodology in the second half of 2024, our survey of global broadband speeds provides a much clearer picture of how our cities are performing on digital connectivity. Hong Kong emerges as the leading city for fixed premises broadband with speeds of 325Mbps reached in July 2025. Investment in 6G and communications infrastructure in China has propelled Asia-Pacific markets towards extremely fast internet speeds and unparalleled connectivity. By comparison, homes in London average at 136 Mbps, less than half of Hong Kong’s median average. While across all cities broadband speeds are generally increasing, particularly in the context of public investment into fibre connections in both Paris and London, this growth appears to be slowing down, despite the wider fibre optics sector forecast for major global growth.

In Germany, the federal government’s Gigabit Strategy set a goal for installing modern fibre optic broadband for 50% of homes and businesses by 2025. While not a national performance metric, between February 2023 and July 2025, Berlin’s fixed broadband speed increased from 92Mbps to 103Mbps. Global telecoms, digital and communications industries are considered a major growth sector for city governments to attract and harness. But with patchy service in major cities, including London and Berlin, there is still more needed to deliver the digital infrastructure our cities need.