LONDON-Hot climates are not exactly a UK mainstay, but thesizzling business sector here has allowed its capital city to topthe European Regional Economic Growth Index for the second year ina row. Published annually since 1998 by LaSalle InvestmentManagement, the proprietary ranking of 91 continentalmunicipalities in 27 countries aims to identify the best localesfor commercial real estate.

Having emerged in recent years as Europe's financial center,London excels in all three categories rated by E-REGI, easilyoutdistancing competitors in growth prospects while measuring highin wealth accretion and business environment. Munich is another bigwinner, moving up five spots from 2006 to second place. That spurtpushes a declining Paris and still-vibrant Dublin each down a spot.Stockholm retained the fifth position, reflecting another strongyear throughout the Nordic region. Helsinki and Oslo, for example,both moved up in the top 10 to seventh and ninth, respectively.Luxembourg scored sixth, Stuttgart is eighth and Madrid earns the10th place ranking.

“With market fundamentals positive and large volumes of capitalstill targeting European real estate, these cities can expect totake a large share of the transaction volume,” says RobinGoodchild, head of European research for LaSalle. Known primarilyfor its global financial strength, London was also credited for adiversified economy that now includes high-tech companies andimpressive inroads into the life sciences arena, says E-REGI. The2012 Olympics is another boost, says E-REGI, with London'sinfrastructure being upgraded to meet the demand.