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Most dynamic real estate markets in the world – Singapore ranks at #9

by • January 28, 2020 • Research and AnalysisComments (0)205

Singapore ranks at number 9 for the most dynamic real estate markets in the world. The listing for Singapore, as being among the most dynamic real estate market in the world is made in JLL’s City Momentum Index.

According to the City Momentum Index, which is now in it’s seventh year, the most dynamic real estate markets in the world are:

most dynamic real estate

The report said that Singapore was ranked as the 9th most dynamic real estate market in the world “due to a combination of healthy office rental growth and heightened real estate investment. Surging tourism levels are boosting the hotel sector.”

Reflecting the vigour of the tech sector, three U.S. cities –Silicon Valley (1st), Boston (4th) and Austin (6th) – appear in the Top 10 for Real Estate Momentum, with Charlotte sitting just outside the top group. They all saw double-digit growth in prime office rents in 2019, highlighting the strength of demand from companies coveting access to
highly skilled labour markets.

Two German cities – Frankfurt (2nd) and Berlin (3rd) – are among the top 3 cities among the most dynamic real estate markets in the world, underpinned by strong corporate occupier and investor demand. In Berlin’s case, this was signified by record cross-border investment activity in 2019.

Europe is further represented in the Top 10 by Helsinki (5th) and Warsaw (10th), which have both experienced heightened investor activity and offer relatively affordable options for corporate occupiers.

Having headed last year’s ranking for Real Estate Momentum, Osaka is set to maintain its dynamism into 2020 as one of the most buoyant commercial real estate markets globally. It is benefiting from a global trend of investors increasingly targeting secondary cities in mature and transparent markets. Osaka’s profile received a boost last year as it played host to the 2019 G20 summit, while further buzz is expected to build ahead of the World Expo, which the city will hold in 2025.

The inclusion of Jeddah (8th) among the most dynamic real estate markets in the world owes much to the hospitality sector, which is set to enjoy sustained growth off the back of increased tourism and further investments in the entertainment sector.

The report said that 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. 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 ChinaShanghai 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, 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.”

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 IndiaHyderabad 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,” concluded Kelly.

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