BNP Paribas Asset Management Alts, KPMG, ULI Germany and the Technical University of Munich:
New discussion paper ‘Future-Proof Locations’ examines how the requirements for property locations are changing
The criteria for a good property location are shifting. Since the turnaround in interest rates, central office locations have proved more resilient than those on the city outskirts. At the same time, factors such as mixed-use development, quality of life, climate adaptation and adaptability are becoming increasingly important for long-term location quality.
These are the findings of the new discussion paper “Future-Proof Locations: How Location Quality is Being Redefined” by BNP Paribas Asset Management Alts, KPMG, ULI Germany and the Technical University of Munich. It combines market analysis with perspectives from urban development, academia and the property sector, and examines which location factors will determine the attractiveness and future viability of property locations in the years to come. Another key focus is on the new possibilities for location analysis: the paper examines digital data sources and scoring models, as well as the future use of artificial intelligence and simulations.
“It is no longer enough for investors to simply note that a location is performing well today,” summarises Thomas Kotyrba, Head of Research, Strategy & Product for Germany at BNP Paribas Asset Management Alts. “What is increasingly crucial is how resilient this quality remains over the holding period and how well the location and property can adapt to changes.” He adds: “Location is thus becoming even more of a risk management issue. In addition to the status quo, we must also systematically factor a location’s adaptability into our investment decisions – throughout the holding period and beyond the point of sale.”
Centrality remains relevant despite changes in the world of work
An analysis of office transactions by BNP Paribas Asset Management Alts, on which the paper is based, shows that new patterns of work and mobility do not automatically lead to a decline in the importance of central locations. Whilst, for the transactions examined prior to the interest rate turnaround, there was no significant price difference between city centres and the outskirts under otherwise identical conditions, since the interest rate turnaround, out-of-centre locations in German ‘A’ cities have been traded at an additional discount compared with city centre locations. The analysis thus provides evidence of a ‘flight-to-centrality effect’.
At the same time, the discussion paper shows that this development cannot be reduced to a simple contrast between the centre and the periphery. Requirements are increasingly varying according to type of use and user group. Whilst attractive and well-connected central office locations may benefit, the greater spatial flexibility – for example, in residential locations – also opens up opportunities for smaller towns and the surrounding areas.
Digital data, scoring and AI are expanding the scope of location analysis
Alongside these changing requirements, the opportunities to analyse location quality in greater detail are growing. In addition to traditional market, demographic and infrastructure data, mobility, footfall, usage, environmental and other geodata are increasingly available. These enable us not only to map what is present at a location, but also, to a greater extent, how a place is actually used and how that usage is changing.
The paper examines various digital analytical approaches and data sources in this context. Among other things, it presents the Location Quality Indicator (LOQI) developed by KPMG. This analytical and scoring model combines traditional property market indicators with mobility and accessibility data, as well as urban planning, social, socio-economic and environmental factors at the macro, meso and micro levels. In this way, it is possible to identify differences between locations that traditional location assessments are only able to capture to a limited extent.
Dr Markus Trost, a partner in the Real Estate practice at KPMG Germany, explains: “We are now able to analyse and understand location quality in a far more nuanced way than we could just a few years ago. The progress lies in being able to assess relevant criteria using large volumes of data and to evaluate various influencing factors simultaneously, based on facts. This reveals differences, risks and development potential that a traditional description of the location alone fails to capture. This transparency supports negotiation processes involving various stakeholders in project developments and provides additional certainty for long-term investment decisions.”
Looking ahead, artificial intelligence and simulations could drive this development further. AI can help to link heterogeneous data sources, identify patterns and continuously evaluate changes. Building on this, future analyses could increasingly simulate how, for example, new mobility services, changes in usage patterns or climatic developments might affect a location. A one-off site assessment could thus increasingly evolve into an ongoing process of analysis and management. However, the expert selection and weighting of criteria will remain crucial even then.
Location quality can be shaped
This discussion paper does not consider location quality solely from the perspective of property investment. Local authorities influence locations through infrastructure, planning law and public spaces; owners and project developers do so through buildings, usage concepts and the design of the surrounding environment. Location quality therefore also becomes a matter of the interaction between different stakeholders.
Sabine Georgi, Managing Director of the Urban Land Institute Germany/Austria/Switzerland (ULI), says: “Sustainable locations are not created by a good address alone. What is crucial is the interplay between land use, mobility, public space, infrastructure and the people who actually use a place. Many of these qualities can be shaped. To achieve this, the urban development and property sectors must work more closely together to consider how locations can not only be attractive today, but also adapt to new requirements.”
The discussion paper also incorporates, amongst other things, the perspectives of Prof. Dr Elisabeth Merk, Head of Urban Planning for the City of Munich, Prof. Dr Fabian Wenner from RheinMain University of Applied Sciences, Christian Scheler from Studio 1komma2 and Stefan Stute from Wüest Partner. Prof. Dr Matthias Ottmann from the Technical University of Munich is also among the authors.
The full discussion paper, ‘Future-Proof Locations: How Location Quality Is Being Redefined’, is available for download here.
¹ Source: IPE 2025 and companies’ financial reports as at 31 December 2025.
² Source: BNPP AM, as at 31 March 2026. Assets under management, including assets under advisory.
³ Source: Ranking based on assets under management (AuM) as at 31 December 2024 for internal and external insurers and external pension funds (global AuM for European asset managers; European AuM for non-European asset managers).
⁴ Source: BCG, based on assets under management (AuM) as at 31 December 2024.
