Dubai has been placed third on the list of the world’s 20 most dynamic cities following the Expo 2020 win with Jones Lang LaSalle (JLL) referring the emirate to being an "elite city that wields clear economic might on the global stage."
The first City Momentum Index (CMI), released by the global consultancy, named San Francisco, London, Dubai, Shanghai and Wuhan at the forefront of cities that demonstrate the combination of strong short term socio-economic and commercial real estate momentum and longer term foundations for success, stating commercial real estate was no longer just a consequence of a city’s success but a driver of it.
Dubai was "bouncing back" following a deep slump in its economy and real estate market since the global financial crisis, JLL said.
"Property prices are rising, but growth appears to be on a sounder footing than in the pre-crash years of 2006-2008, underpinned by the city’s strong global connectivity and its status as the service hub for the MENASCA region, as well as its position as a preferred staging point for an increasingly dynamic Sub-Saharan Africa.
"Furthermore, winning the bid to host Expo 2020 has given the city renewed confidence and momentum," the report added.
Last week, Dubai Land Department said the total value of real estate transactions rose by 53 per cent to Dh236 billion in 2013 compared to Dh154 billion in 2012.
Knight Frank said in its December report that Dubai's real estate market is expected to be the world's top performer in 2014, with prices expected to rise by 10 to 15 per cent. DLD Director-General Sultan Butti bin Mejren has predicted a 35 to 40 per cent increase in prices this year.
Jeremy Kelly, Director, Global Research, JLL, said in a statement: "City momentum is about far more than just raw GDP growth. The true foundation of highly dynamic cities emerges from such factors as speed of innovation and creation of cutting-edge businesses along with new building construction, property price movement and investment in real estate from cross-border investors and corporations.”
The CMI offers a uniquely comprehensive perspective that identifies the signals of change and characteristics of city momentum. By focusing on the features of a city that are likely to underpin future performance, the CMI stands apart from the standard historic performance upon which most indices are based.
It is such measures of dynamism in infrastructure, connectivity and innovation that we believe will be steering many investment and location decisions in the future, though investors and corporates should note that high momentum can pose both risk and opportunity.
The CMI assessed 111 cities worldwide with a weighted overall score based on 34 short-term and longer term variables.
Short-term socio-economic momentum variables included recent and projected changes in GDP and population, air passenger traffic, corporate headquarter presence and recent levels of foreign direct investment as a proportion of a city’s economy.
Short-term commercial real estate momentum variables included recent and projected percentage changes in office net absorption, office construction, office rents, shopping mall construction and retail rents, direct commercial real estate investment volumes and real estate transparency.