Asia Pacific’s three established world cities risk being outshone by emerging cities in the region over the next decade, according to new research from global real estate consultancy JLL in conjunction with The Business of Cities.
Tokyo, Singapore and Hong Kong make up half of the ‘Big Six’ established world cities and, along with London, New York and Paris, attract world class corporations, talent and more than one fifth of global real estate investment.
However, the report, Globalisation and Competition: The New World of Cities, reveals that a number of cities in Asia Pacific could challenge their dominance. Sydney and Seoul are identified as the most likely to break into this elite group in the future. Meanwhile Shanghai and Beijing are considered nearly-emerged, with Shanghai already one of the world’s top 10 financial hubs.
Rosemary Feenan, director of Global Research Programmes at JLL, says: “In order for the ‘Big Six’ cities to maintain their dominance, they will need to execute bold and ambitious urban transformation projects to accommodate growth and stay globally competitive.”
“Our research shows that a new world order of cities is evolving, with several emerging cities ready to break from the pack. In Asia in particular, there are strong challenges to the old order from agile higher-value emerging cities like Bangalore, Shenzhen and Guangzhou.”
Singapore and Hong Kong remain the most business-friendly cities in the world, along with having strong education, innovation and infrastructure credentials. Tokyo, meanwhile, is the world’s third-biggest real estate investment market and has recently seen a record-breaking number of tourist arrivals, thanks to visa deregulation and the weaker yen.
However, in the new era of city competition, the rigid hierarchy is breaking down as more cities than ever ‘go global’. The increasingly globalised urban world is changing the geography of commercial real estate and is offering new opportunities and niches for cities outside the old order, says the report.
Alastair Hughes, Asia Pacific CEO of JLL, says: “As emerging cities in Asia Pacific move to the next phase of their evolution, the real estate sector will play an increasingly important role in creating a ‘sense of place’ and making them more liveable and sustainable. This will have wide-ranging implications for citizens, governments, corporations and provide some great opportunities for investors.”
Jakarta and Manila are among the emerging cities making the fastest progress across key indicators, currently seen as ‘high potential, but weakly governed’. These cities, along with Mumbai, are attracting investment and outsourcing activities, although they face a number of challenges relating to infrastructure, governance and quality of life.