Dubai in top three of world's most dynamic cities
City Momentum Index reports Emirate 'bouncing back' from slump
Dubai's Expo 2020 victory has helped propel the city into the top three cities in a global City Momentum Index published by Jones Lang LaSalle.
Recognising that commercial real estate is no longer just a consequence of a city’s success but a driver of it, the index named San Francisco, London, Dubai, Shanghai and Wuhan at the forefront of cities that demonstratethe combination of strong short term socio-economic and commercial real estate momentum and longer term foundations for success.
The report said Dubai was "bouncing back" following a deep slump in its economy and real estate market since the global financial crisis.
"Property prices are rising, but growth appears to be on a sounder footing than in the pre-crash years of 2006-2008, underpinned by the city’s strong global connectivity and its status as the service hub for the MENASCA region, as well as its position as a preferred staging point for an increasingly dynamic Sub-Saharan Africa," Jones Lang LaSalle said.
It added: "Furthermore, winning the bid to host Expo 2020 has given the city renewed confidence and momentum."
Dubai Land Department said earlier this month that the total amount of real estate transactions in Dubai exceeded AED236 billion ($64.2 billion) in 2013, up from AED154 billion in the previous year.
Last month, Knight Frank said Dubai's real estate market is forecast to be the world's top performer in 2014, building on this year's rapid price growth. The property consultancy's Prime Global Forecast predicted price growth of between 10-15 percent next year, ahead of Asian powerhouse markets such as Beijing and Shanghai.
Jeremy Kelly, director, Global Research for Jones Lang LaSalle: “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.
"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.”
The City Momentum Index assessed 111 cities worldwide with a weighted overall score based on 34 short-term and longer term variables.
Short-term socio-economic momentum variables included 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 included 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.