With Dubai ranking in the top 20 for the first time in three years, the Emirate continues to be the major business hub in the Middle East
DUBAI — Cities in the Middle East and Africa (MEA) are gaining momentum, with Dubai, Riyadh and Nairobi all ranked within the top 20, according to JLL’s City Momentum Index 2020 which identifies the world’s most dynamic cities from a real estate perspective.
Now in its seventh year, the annual Index combines socio-economic and commercial property metrics to provide new insights into 130 major established and emerging business hubs across the globe.
With Dubai (14th) ranking in the top 20 for the first time in three years, the Emirate continues to be the major business hub in the Middle East, with more than half of the population aged 20-40 (the second highest proportion globally). Government initiatives such as the relaxation of visa regulations have also been designed to balance out the construction boom in commercial and residential properties while momentum is expected to be fuelled further in the lead-up to Expo 2020 Dubai.
The Saudi Arabian capital, Riyadh (18th) enters the top 20 for the first time and is benefitting from Saudi Arabia’s ‘Vision 2030’ program of economic reforms, with its objective of diversifying the economy away from oil. Initiatives to improve the quality of life through better infrastructure and entertainment in combination with introducing regulations to expand tourism will continue to have a positive impact on the economy and real estate market.
Both Dubai and Riyadh have ambitious infrastructure plans. Dubai’s infrastructure impetus is in part being driven by Expo 2020, while the scheduled opening of the Riyadh metro network in 2020-2021 is expected to transform the city’s mobility.
Nairobi (4th) has made the top 20 for each of the past six years, reflecting its position as one of Africa’s most dynamic city economies. Momentum is supported by favorable demographics, infrastructure investment, technology, tourism and retail.
Thierry Delvaux, CEO of JLL MEA, said: “It is great to see the MEA region represented in the top 20 ranking of the Momentum Index, driven by government initiatives. These cities are leading the way by successfully addressing infrastructure needs to further enhance mobility, while creating thriving, inclusive, safe and affordable communities. Moving forward, we will see real estate play a more important role in smart-city futures, driving greater energy efficiency, and promoting sustainable, scalable and smart developments.”
The results also show a continued shift in global influence from west to east, with Indian, Chinese and Vietnamese cities dominating the top positions. India – with seven cities in the top 20, the most of any country – leads the 2020 Index, despite last year’s slowdown of the nation’s economy. This strength is driven by locations in the country’s southern states, as Hyderabad (1st) and Bengaluru (2nd) retain their status as the top two cities for short-term momentum.
Jeremy Kelly, Director of Cities Research at JLL, said: “The remarkable dynamism in the emerging Asian economies is proof that economic reforms, business growth and infrastructure investment can drive the expansion of industry, significantly in the tech sector, and facilitate a start-up culture. This is now being repeated the world over, as geographical diversity looks to be returning to the Index.”
China’s role in driving global momentum continues to be significant; one-fifth of the global top 20 cities are in China. Shanghai stands alone as the only city to feature in the top 20 throughout the past seven years.
The Index identifies a number of key growth drivers, including talent attraction, the expansion of innovation hubs and better urban planning, that cities can employ to meet the challenges faced by rapid momentum.
How talent and innovation are driving momentum
Momentum in Chinese cities Chongqing (11th), Wuhan (13th), Hangzhou (15th) and Shanghai (17th) is driven by a young talented population attracted to dynamic, innovative urban centers. Although just 40 years old, Shenzhen (10th) has become a magnet for several of China’s leading tech giants that are headquartered in the city, creating a vibrant tech start-up scene and a hub for innovation. Young talent from across China have taken note; two-thirds of Shenzhen’s residents are aged 20-40 – the highest proportion of any large city in the world.
Innovation is also having an impact on cities in the United States with Silicon Valley (9th) and Austin (19th) among the world’s most dynamic cities – the only representatives in the top 20 from developed economies. Their reputations as established technology and innovation hubs are attracting young talent, making both cities attractive real estate investment destinations.
Meeting the challenges of climate change and rapid development through innovation
Several cities in the top 20 stand out as they transform their urban environments in pursuit of a low-carbon future but Dubai takes the lead in sustainability initiatives. Dubai (14th) has committed to ambitious sustainability goals of reducing water and energy consumption by 30% by 2030 and using 75% clean energy by 2050. The Dubai Electricity and Water Authority’s ‘Green Dubai’ initiative is also promoting more sustainable energy use.
The importance of transitioning to a “future fit” city
With several cities, including Ho Chi Minh City (3rd), Manila (8th), Shanghai (17th) and Mumbai (20th), at risk from rising sea levels and intensifying weather patterns caused by climate change, the real estate industry has an important role to play in helping fast-growth cities transition to a more sustainable model of urban development. Not only are emerging cities more susceptible to the effects of climate change, they are also facing the most intense pressure to change.
The Index shows the steps that cities can take to overcome some of the issues associated with rapid growth. Continued investment in infrastructure can unlock new locations, reduce congestion and improve air quality. Chinese and Middle Eastern cities continue to benefit from investment in metro lines, high speed rail and increased airport capacity. The growth of “micro-mobility” is another positive step, illustrated by Hyderabad’s introduction of smart bikes and electric cars. Smart city solutions, such as bike rentals, improves quality of life, helps increase inclusion and aids in the transition to a low carbon environment.
“One common ingredient when looking at cities that succeed at rapid-growth is the importance placed on governance and leadership – something often overlooked. The complex nature of city transformation relating to the innovation economy, climate mitigation and a changing geopolitical world means a city’s governance system is increasingly critical to a city being ‘future-fit’ for the coming decades,” Kelly emphasized. — SG
