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Top 10 improving cities of 2015

The U.S based  professional services and investment management company JLL (Jones Lang LaSalle) released the Global300: The New Commercial Geography of Cities 2015 report. The report profiles 300 cities that account for the bulk of the world’s commercial real estate market activity. Based on an Index of Commercial Attraction (ICA) which measures a city’s economic and real estate power and status, JLL’s Global300 underpinned by a proprietary database of key performance indicators covering 660 cities worldwide. The Index is unique in that it includes key real estate measures (namely investment volumes and commercial real estate stock), as well as socio-economic and business indicators such as economic output, population, air connectivity and corporate presence.

The cities which make up the Global300 are the world’s most powerful, productive and connected. Their 1.3 billion citizens account for nearly 40% of global economic activity, more than Europe and North America combined. They host 88% of the headquarters of the world’s 2,000 largest listed companies, generate 40% of the world’s finance and business employment, and more than 80% of the world’s air passengers pass through their airports. The Global300 also represent the bulk of commercial real estate market activity, amounting to nearly three-quarters of global direct commercial real estate investment and over 90% of the world’s prime office stock. They are the overwhelming focus of international corporations, retailers, hotel brands and real estate investors.

According to the research, these are the top 10 cities that have shown the greatest improvement in their commercial attraction over the past year:

The Eurozone’s second-largest city economy is at the forefront of the region’s recovery, with both GDP and employment increasing at their fastest rate in seven years. This is feeding through into renewed momentum in Madrid’s real estate market, with direct real estate investment volumes increasing by 129% over the last year to stand at their highest level since 2008. Office rents are bouncing back robustly, with the market expected to be among Europe’s strongest performers in 2016.

Economic and employment growth are gaining momentum in Italy’s economic hub as it continues to outpace the rest of the country, while real estate investment volumes are at their highest level since the Global Financial Crisis. The 2015 Milan Expo has focused attention on its status as a global centre for innovation and its shifting emphasis towards high-value activity. An example is the Nuova Bovisa development, which is set to bring together higher education institutions and industry to focus on energy and sustainable mobility research in the city, and is just one of a range of major developments ongoing in Milan, including CityLife, the new Porta Nuova business district and the multibillion dollar Milanosesto project.

With the fastest-growing economy and population of any major city in Europe, Istanbul is building its position and status as one of the continent’s four anchor megacities (together with London, Paris and Moscow). This is reflected in its increasing importance as a transport hub, with the number of air passengers to the city almost doubling over the past five years to over 80 million. The city is investing in infrastructure with new metro lines, a third bridge over the Bosphorus and a third airport under construction. The city’s Grade A office stock is set to grow by 57% over the next three years.

Political stability is providing a boost to economic growth in the MENA region’s most populous city and largest urban economy. The completion of the New Suez Canal is generating significant demand from developers and logistics companies, while investment from international retailers and corporations has also been increasing over the past year. Much of this improving demand has been focused on decentralised areas such as New Cairo, where rents have risen by 28% over the past year. Cities Research Center – Global300 7

MENA’s second most connected city (after Dubai), Jeddah saw a 19% increase in air passengers over 2014 to 27 million, an improvement of 9 million annual passengers over the last decade. Ambitious projects such as Kingdom City, which will hold the world’s tallest building in the Kingdom Tower when complete, together with upgrades to infrastructure (including the under-construction metro) are providing further impetus to Jeddah’s growing economy.

The growing presence of global financial institutions using Riyadh as a regional base is bolstering its position as a regional financial centre. The number of Forbes 2000 companies headquartered in the city has tripled over the past 10 years, with a majority of these in the financial sector. Riyadh’s emerging status as a finance hub is being underlined by the construction of the King Abdullah Financial District, a US$8 billion project to build a dedicated new financial centre which will incorporate 3 million square metres of mixed-use space and house the Saudi Stock Exchange.

The MENA region’s second-largest city economy (after Cairo), the lifting of international sanctions is expected to provide a welcome boost to a city that has effectively been off the international radar for several decades. Testimony to the city’s slow re-emergence onto the world stage, air passengers grew by 13% in the last year as businesses start to explore opportunities.

The commercial capital of the world’s fastest-growing major economy, with growth exceeding 7% in the city over each of the last three years. Reforms being undertaken by the national government are boosting confidence in the national and metro area economy. Construction levels are high, with Mumbai increasing its Grade A stock by 26% over the past three years, and are expected to add an additional 22% over the next three years. Mumbai is enhancing its position as a hub for global corporations, with firms among the world’s 2,000 largest companies headquartered in the city rising by 50% over the last 10 years.

One of the world’s 10 largest urban economies, economic growth is expected to accelerate from 2016 onwards on the back of government spending on infrastructure; the Mass Rapid Transit in Jakarta is on track for completion in 2019 while plans for a light rail system are also taking shape. We expect continued expansion demand from firms which feed off Jakarta’s most reliable resource – a large and growing population base.

The economic capital of Africa’s largest economy, Lagos also has the fastest-growing population of any major city, with its population expected to nearly double over the next 15 years. Lagos is emerging as a regional hub for multinational corporations seeking to enter the African market and is building infrastructure to match its ambitions, including projects such as Eko Atlantic City, a new district being built on 10 million square metres of land reclaimed from the Atlantic Ocean.