For international corporations, cross-border retailers, big hotel brands and global investors, the world’s real estate activity is largely concentrated in 300 cities around the world.
They are the destination of nearly three-quarters of global direct commercial real estate investment and home to 90 percent of the world’s prime office stock.
While many of these are firmly established such as New York, Tokyo, London and Paris, others are creating a name for themselves. From the Middle East to Indonesia, JLL research has identified the top 10 emerging destinations which stand out as the most improved business centers.
Click through the slides above to find out more about the cities climbing up the rankings in terms of their commercial appeal in the industry. (Cities listed A-Z)
Political stability is providing a boost to economic growth in Cairo, which is the Middle Eastern and North African 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 percent over the past year.
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 percent over the next three 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.
Second most connected city (after Dubai) in the Middle East and North Africa, Jeddah saw a 19 percent 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 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.
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 percent 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.
The commercial capital of the world’s fastest-growing major economy, with growth exceeding 7 percent 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 percent over the past three years, and are expected to add an additional 22 percent 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 percent over the last 10 years.
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 meters of mixed-use space and house the Saudi Stock Exchange.
Middle East and North Africa 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 percent in the last year as businesses start to explore opportunities.