An international analytical Agency Jones Lang LaSalle (JLL) has conducted a research aimed at identification of the most dynamic cities. In fact, it is a rating of the cities that demonstrate positive economic and social dynamics, and the growth of indicators in the domestic markets of the commercial real estate. It should be noted that the leading positions are assigned for the cities that are able to provide a reliable basis for the long-term projects.
The research covered more than hundred cities in the world, among which are the twenty leaders with high level of development were identified. The leading positions of the rating were shared among such cities as San Francisco, Dubai, London and Shanghai. It is noteworthy that the experts and analysts, in the process of evaluations of the international ranking, have worked not only with the current economic indicators, but also with the underlying elements that make conditions for the dynamics of the growth of the urban centres.
The research results provide a rounded understanding of how the local real estate market can affect the development prospects of the world's largest cities. The main feature of this research is that it is based not on the previous achievements, but on the characteristics that influence the growth and dynamics in both long-term and short-term prospects. Among these factors, one can highlight the dynamism of the development of the social and urban infrastructure, innovations, urban communications, and other factors that affect the choice of the potential investors and assessment of the current risks in the real estate market.
Background information:
Jones Lang LaSalle analytical agency specializes in provision of the comprehensive services, including professional financial services in the area of the real estate. The company is represented in 70 countries and works in more than thousand cities around the world.
Key algorithms of the analytical research
The JLL agency rates cities on the social and economic factors and indicators in the area of the real estate. The following areas of development are considered as key positions of research:
- Mid-market price of the real estate;
- Investment volumes into the real estate sector;
- Activity of construction companies;
- Average volumes of productivity;
- Educational component and environmental protection;
- Innovations and advanced technologies;
- Standard of living and quality of communications.
In total, the largest cities are rated on 37 parameters, which include both long-term and short-term indicators. In general, the research is based on a methodology that reflects the dynamics of the growth and stability of the economy and the local real estate market in individual cities.
Criteria of the international rating
The main criteria, which are basic for the algorithm of the research, can be divided into several groups, in particular:
The short-term indicators of the economic and social situation include:
- Volume of the operating passenger air transportations;
- Presence of the representative and head offices of the large international companies and holdings in the city;
- The percentage of the urban economy, which falls at foreign investments.
The long-term indicators that determine the perspectives of the economic growth, including indicators in the area of the commercial real estate, include:
- Presence of the modern educational institutions and appropriate educational infrastructure in the cities;
- Presence of the venture capital on the local market and level of the innovative development of the market.
The short-term indicators of the local real estate market include the following indicators:
- Occupancy rate of commercial and office premises;
- Pace and volume of construction of commercial and office real estate;
- Average rent of real estate;
- Investment volumes in the sector of commercial and office real estate;
- Degree of transparency of the local real estate market.
According to analysts of JLL company, this approach to research enables one to understand and to explore more thoroughly the dynamics of development, and to determine the readiness of modern cities to the changes in the real estate market. The main goal of the research is to identify the evolutionary processes in different cities around the world, and the assessment of the factors that contribute to the economic growth and efficiency.
Dubai megalopolis in the international rating
Dubai megalopolis, in the annual rating according to the Jones Lang LaSalle agency, occupies the 13th place and is one of the twenty most dynamic cities. According to experts, the main factor that allows Dubai to take such high positions is the increase in prices and stabilization of the local real estate market. The multimillion investments, which are associated with the organization of the international exhibition EXPO 2020, are considered as the main locomotives of the megalopolis.
According to preliminary numbers, during the period of the international exhibition (October 20, 2020 – April 10, 2021), the Emirate will be visited by more than 25 million foreign visitors and tourists. Besides, more than 270 thousand new jobs will be created, and investments into the development and improvement of infrastructure will amount about 30 billion Dirhams.
Leading Cities of the JLL international rating
Leading positions in the JLL international agency rating are as follows:
Leading cities in terms of investments into the construction of commercial real estate:
- 1st place – San Francisco;
- 2nd place – London;
- 3rd place – Dubai.
Cities chosen for holding large-scale international events in 2020:
- Summer Olympic Games 2020 – Tokyo;
- International exhibition EXPO 2020 – Dubai.
It should be noted that continental Europe is under-represented in this rating. This situation is associated with a lag in the dynamics of urban growth. However, many European cities have a great potential for the dynamics and growth in the long-term perspective. For example, such cities as Berlin, Paris and Amsterdam have quite high indices in the area of education, ecology and innovation. This is the place where a strong concentration of the skilled labor is observed, and the advanced technologies are introduced.
