Asia Pacific is home to 19 of the world’s 20 most dynamic cities, reflecting the region’s rapid urbanization and economic growth, according to a report published today by JLL.
The latest edition of the property consultancy’s City Momentum Index found that India’s Bengaluru and Hyderabad led the world in terms of the growth of their urban economies and real estate markets, with the Vietnamese capital of Hanoi coming in third place.
Indian and Chinese cities dominate the rankings this year in the sixth edition of the report, accounting for three quarters of the top 20. The only non-Asian city on the list is Nairobi, Kenya, in sixth place, which has been boosted, perhaps in more ways than one, by infrastructure investment from China.
Tech Helps Spark Growth
JLL’s analysts attributed much of Asia’s dynamism to support from the spread of technology-driven companies.
“It’s clear that the tech sector is a key driver of both real estate and economic momentum (in Asia) – driven by large technology firms as well as dynamic start-ups in cities like Bengaluru, Hyderabad, Ho Chi Minh City and Shenzhen,” said Jeremy Kelly, director of global research at JLL.
The annual index measures momentum for 131 of the world’s most commercially active cities by tracking a range of socio-economic and commercial real estate indicators over a three-year period to identify the urban economies and real estate markets undergoing the most rapid expansion.
The 2019 results were a departure from the previous year’s, which featured some of the world’s largest and most globally connected cities like New York, London, Paris and Tokyo as well as smaller metro areas that have leveraged their strengths in education, livability and sustainability such as Silicon Valley, Melbourne and Stockholm.
The absence of European and American cities marked a continuing shift of fast urban growth, driven by globalization, innovation and demographic factors from the West to the East, the agency noted in a statement.
Growing Cities, Growing Challenges
But while strong growth brings opportunities for economic and social development, it also brings challenges that cities must address to ensure short-term growth transitions into long-term momentum, according to the report’s authors.
“These cities need to address the environmental and social impacts of rapid growth such as social inequality, congestion and environmental degradation,” Kelly added. “The provision of smart, efficient and productive real estate and increased transparency are key factors in driving long-term, sustainable growth.”
He suggested the building of regeneration projects with a long-term vision that nurture new businesses and improve lives as well as large-scale infrastructure projects help combat problems around congestion and improve accessibility. Manila (which ranked 12th in this year’s index) has its “Build Build Build” program which includes more than 2,000 projects and is expected to improve congestion, increase power reliability, reduce the impact of climate change and redevelop urban areas.
Smart infrastructure and sustainable technology, meanwhile, can be utilized to create livable cities. The Chinese city of Xi’an, ranked ninth in this year’s index, has installed a 100-meter-tall air purifying tower to reduce smog and improve air quality.