Bangkok has been listed among the global top 30 rankings in terms of short-term socio-economic and commercial real estate momentum in the latest ranking by a property consultancy JLL.
In JLL's 2018 City Momentum Index (CMI), the Thai capital ranks 28th after Dubai (27th) and Singapore (26th) and ahead of Seattle (29th) and Bucharest (30th).
JLL’s CMI tracks a broad range of factors to identify cities which possess the attributes for success over the short and long term. The Index covers 131 major established and emerging business hubs across the globe, measuring each city’s short-term socio-economic and commercial real estate momentum, together with its “future-proofing” capacity -- the ability to maintain this momentum over the longer term.
Asia-Pacific cities dominate the short-term city momentum index, accounting for 25 of the global top 30. In addition, the top three spots in the index are Asian cities including two from India -- Hyderabad (1st) and Bangalore (2nd), and one of Vietnam’s major commercial hubs, Ho Chi Minh City (3rd).
India maintains its pre-eminence in the short-term momentum rankings as its cities register among the highest rates of demographic and economic growth globally, while also benefiting from government efforts to boost business attractiveness and invest in infrastructure.
Vietnam is attracting sizeable volumes of foreign direct investment as its major cities, Ho Chi Minh City and Hanoi, integrate into regional and global supply chains for high-technology manufacturing, helping to spur rapid economic and income growth.
Chinese cities show no sign of diminishing momentum, accounting for 11 of the global top 30. China’s “powerhouses”, which are firmly integrated into global production networks and engines of the national economy -- Nanjing (7th) and Hangzhou (9th) -- are the top performers, boosted by their shift up the value chain.
According to the report, Southeast Asia’s megahubs listed among the global 30 rankings, including Manila, Jakarta, Kuala Lumpur and Bangkok, are continuing to drive forward on the back of significant economic momentum.
These cities act as regional gateways and have the scale to compete for talent, visitors and innovation. Offering substantial growth potential, they are key expansion markets for many corporates and are drawing particular interest from Chinese companies as they internationalise.
These cities also have some of the highest levels of real estate completions across the globe as they build out the infrastructure to service this demand.
Nonetheless, fewer cities from Asia-Pacific are in the global "future-proofing" top 30 rankings. These include Tokyo, Seoul, Sydney, Melbourne and Singapore.
The report also identifies Singapore as being the only Asia-Pacific city that is in the "sweet spot", scoring in the global top 30 on both measures. The city-state ranks 26th for short-term economic and real estate dynamism and 29th for its effort in future-proofing for longer-term success.
“Asia Pacific’s cities continue to experience phenomenal rates of change as they serve expanding domestic economies and act as gateways to the world’s fastest-growing region for global investment and trade. Robust growth is contributing to real estate market momentum across the region, with significant levels of construction as modern stock is built to meet demand and record levels of commercial real estate investment in 2017,” says Jeremy Kelly, director for global research at JLL.
“However, rapid growth can also lead to issues such as strains on infrastructure, affordability constraints and environmental degradation. In order to maintain their growth over the longer term, Asia Pacific’s cities will need to focus on future-proofing their markets through improved liveability and affordability, regulatory transparency and physical and technological infrastructure,” he says.
“For investors, there is an imperative to know which cities will be able to gain from technological transformation for long-term value preservation and growth. Developers can contribute to city success by understanding city strategies and their capacity for supporting the move towards new types of economic activity, enabling them to produce transformational projects that facilitate creativity, innovation and the sustainable communities that businesses and workers are now demanding.”
JLL’s Global Research combined a total of 46 variables to assess short-term momentum and longer-term future-proofing attributes. New indicators in the CMI 2018 include the number of technology "unicorns" created in each city and the quality of public transport infrastructure.
Both indices cover 131 major established and emerging business hubs across the globe. The short-term component of the CMI incorporates forecasts over a 3-year (2018-2020) horizon. The future-proofing index focuses on elements which are expected to impact a city’s competitiveness over a long-term (10-year) timeframe.