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San Francisco, London, Dubai, Shanghai and Wuhan lead JLL MENA’s list of dynamic cities.
Recognizing that commercial real estate is no longer just a consequence of a city’s success but a driver of it,
JLL MENA (NYSE:JLL) has identified
San Francisco, London, Dubai, Shanghai and
Wuhan at the forefront of cities that demonstrate the combination of strong short term socio-economic and commercial real estate momentum and longer term foundations for success. In its new, proprietary
City Momentum Index (CMI), JLL MENA goes beyond traditional, static economic rankings to delve into the underlying drivers that are the hallmark of highly dynamic cities.
Jeremy Kelly, Director,
Global Research for JLL MENA:
“City momentum is about far more than just raw GDP growth. The true foundation of highly dynamic cities emerges from such factors as speed of innovation and creation of cutting-edge businesses along with new building construction, property price movement and investment in real estate from cross-border investors and corporations.
The new City Momentum Index offers a fresh and uniquely comprehensive perspective that identifies the signals of change and characteristics of city momentum. By focusing on the features of a city that are likely to underpin future performance, the CMI stands apart from the standard historic performance upon which most indices are based. It is such measures of dynamism in infrastructure, connectivity and innovation that we believe will be steering many investment and location decisions in the future, though investors and corporates should note that high momentum can pose both risk and opportunity.”
Alan Robertson, CEO for JLL MENA
Middle East & North Africa said:
“Our new Index provides clear evidence to support the view that Dubai is one of the world’s most dynamic cities. Events such as Expo 2020, along with Dubai’s strong global connectivity and growing status as a service hub for MENA and southern/central Asia will support sustainable momentum over the longer term horizon.”
The cities that top the
CMI are characterized by these dynamics:
While Continental European cities are under-represented at the very top of the list and show lower momentum in comparison with emerging cities, several powerful and successful European cities possess the attributes for longer term success as validated by the ongoing high levels of real estate capital inflows. Demonstrating success factors relating to education, innovation, sustainability and transparency, Paris, Berlin and Amsterdam, for example, are distinguished by their strengths in talent and new technologies, while Copenhagen has among the world’s strongest ‘green’ credentials.
City Momentum Index assesses 111 cities world-wide with a weighted overall score based on 34 short-term and longer term variables.
Short-term socio-economic momentum variables (40 percent of the model) include recent and projected changes in GDP and population, air passenger traffic, corporate headquarter presence and recent levels of foreign direct investment as a proportion of a city’s economy.
Short-term commercial real estate momentum variables (30 percent of the model) include recent and projected percentage changes in office net absorption, office construction, office rents, shopping mall construction and retail rents, direct commercial real estate investment volumes and real estate transparency.
Longer term variables (30 percent of the model) that are likely to determine future economic strength and real estate momentum include high-value incubator indicators such as university presence and educational infrastructure, innovation capability and presence of technology and venture capital firms.
Craig Plumb, Director of
Research for JLL MENA commented: “the results of our CMI illustrate that Dubai is among an elite group of major internationalised cities that are becoming truly global markets. Dubai’s position in this list is due to its growth as a major global gateway that has fuelled rapid growth across a broad range of socio economic and real estate indicators."
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