From Industry to Property Investment Clusters and Spatial Cognition: New Avenues in Regional Economic Analysis

Investments into built environments have become a major economic driver, and throughout Europe, regions compete to attract (international) investment capital. Over decades, regional economic analysts have explored and theorized processes of change to adequately plan for regional development. Changes connected to financialized property markets, however, challenge some of the most fundamental assumptions and principles of regional economic analysis: when the built environment is considered as a tradable investment asset, and liquid capital only temporarily fixes in land and property as a by-product, prominent spatial models and theories that centre for example around the role of industry clusters and the locational choices of firms for regional economies, become largely uninstructive. This paper calls for new avenues in regional economic analysis that incorporate financialized property markets and the spatial cognition of investment actors. I argue for a combination of territorial evidence, commercial property investment transaction data, and in-depth insights into the spatial cognition of property market actors in regional investment decisions. The paper begins by reviewing dominant approaches in regional economic analysis. I evaluate the extent to which commonly used indicators capture and reflect financialised property market dynamics and subsequently develop an adapted framework for regional economic analysis. The framework particularly emphasises the need to move beyond widespread assumptions on the rational economic behaviour of property investors by including their perceptions, emotions and intersubjectivities influencing investment locations. The twofold analysis follows a mixed-method approach. First, I conduct a fine-grained analysis of regional economic indicators and their link to residential property investment patterns in continental Western Europe on the basis of detailed territorial evidence from the European Spatial Planning Observation Network. Then, I cross-analyse the territorial evidence with commercial property investment data. By mapping datasets conjointly, I can identify major (mis)matches in regional trends between territorial indicators, transactions volumes and investor profiles. Lastly, I zoom into the Amsterdam Metropolitan Region to unravel context-dependent cognitive structures of investment actors through in-depth interviews with residential property investors to explain these (mis)matches. I end the paper by reviewing the framework and stressing the importance of including territorial data in real estate studies, conducting novel regional analysis valuable for real estate and regional studies scholars and practitioners alike.