Cities in Asia Pacific dominate top spots on JLL’s City Momentum Index
The Index combines socio-economic and commercial property metrics of 130 markets to identify the world’s most dynamic urban centers
DAVOS, Switzerland, Jan. 21, 2020 – Asia Pacific is home to the most dynamic urban centers in the world with three-quarters of the world’s top 20 cities in the region. This is according to the latest JLL (NYSE: JLL) City Momentum Index, now in its seventh year.
The results 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.
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.
Amid the abundance of Asian cities in the lead, this year’s rankings are also the most geographically diverse for several years. North American cities Silicon Valley (9th) and Austin (19th) feature in the top 20 for the first time. There are also signs of momentum returning to the Middle East, with Dubai ranking in the top 20 for the first time in three years and the Saudi Arabian capital, Riyadh, breaking into the top 20 for the first time.
Jeremy Kelly, Director of Cities Research at JLL, says: “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.”
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
Fast growth can also exacerbate issues caused by climate change. Wuhan (13th), a low-lying city located at the confluence of the Yangtze and Han rivers, is prone to flooding. This has been compounded by unchecked property development resulting from rapid growth. In response, the municipal government has intensified efforts to increase climate-resilient construction under China’s “sponge city” initiative that seeks to enhance rain water absorption capacities.
Several cities in the top 20 stand out as they transform their urban environments in pursuit of a low-carbon future. 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. In India, Hyderabad is looking to technology to reduce the demand for air conditioning with cool roofs that reflect sunlight and absorb less heat.
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,” concludes Kelly.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.