London slipped from fourth place to tenth in the Schroders Global Cities 30 index, as a result of the U.K.’s vote to leave the European Union.
The index, compiled by Schroders for the first time and released Tuesday, looks at a range of factors, including the projected growth of the economy, disposable incomes over the next decade and the size of the working population. London had been initially ranked in fourth place but the Brexit vote led to a reassessment by the British asset management firm.
The index assesses and ranks the growth and future prospects of 161 global cities and has seen China's mega-cities take three of the top five places. Shanghai topped the index followed by New York in second place, Tianjin (also in China) in third and Beijing in fourth place.
"It should be no surprise China's cities rank so highly given it has strong factors such as gross domestic product (GDP), working population and retail sales," Hugo Machin, co-head of Global Real Estate Securities at Schroders, said in an official statement.
"Although it has slowed recently China is still growing more strongly than the rest of the world and we believe it will become a much bigger part of our forecast over time."
Despite the surprise fall for London, Schroders' Machin said London still remains important.
"London's fall in the index should not prompt despondency. It remains one of our favorite cities, with more high-skilled knowledge-based workers than New York and with huge transport infrastructure projects, such as Crossrail, making a tangible difference to its economic future," he said.
The U.K.'s decision to leave the EU was followed by a sell-off in the financial markets with sterling falling to a 31-year low. The vote also led to fears of the economy slowing down and London becoming less favorable for financial services professionals and those who consider the city a useful link for Europe.
Meanwhile, a number of U.S. cities also make it to the top 10, with Dallas in fifth position, Los Angeles in seventh place, Houston in eighth and Washington in ninth. The top ranked cities share a range of common factors such as good universities, strong infrastructure and pools of highly-skilled workers, according to Schroders.
"They also tend to be economically diverse and are highly attractive places to live due to diverse cultural and leisure activities," it added.