City Momentum Index 2019 showcasing the region’s continued rapid urbanization and strong economic growth

<p style="text-align: center;"><em><strong>JLL Momentum Index rankings identify the urban economies and real estate markets which are currently undergoing the most rapid growth. With 19 of the top 20 cities from Asia Pacific, the rankings highlight and showcase the region’s continued rapid urbanizat

BY Realty Plus
Published - Feb 25, 2019 6:25 AM

JLL Momentum Index rankings identify the urban economies and real estate markets which are currently undergoing the most rapid growth. With 19 of the top 20 cities from Asia Pacific, the rankings highlight and showcase the region’s continued rapid urbanization and strong economic growth.

Asia Pacific is home to 19 of the Top 20 cities in this year’s Index, reflecting the region’s continued rapid urbanisation and economic growth.  There are no cities in either Europe or the Americas in the Top 20.  Only one city outside of Asia Pacific, Nairobi, ranks in the 20 most dynamic cities in the globe. Cities that are growing quickly tend to punch above their weight in attracting companies and people; however, this can often lead to challenges - such as social inequality, congestion and environmental degradation. Real estate plays a pivotal role in helping to address these challenges.

• Urban Transformation: Major urban transformation projects can significantly alter a city’s trajectory – with new neighbourhoods and mixed-use developments helping to nurture new specialisms, improve lives, change a place’s meaning and have knock-on effects on its surroundings.
• Placemaking: A people-centred approach to urban design typically has real estate projects at its core and helps to improve the urban fabric of the city and how people interact with it.
• Transparency: A transparent real estate market plays a key role in city competitiveness, not only as a facilitator of new investment and business activity but also in enabling sound long-term planning, enhancing community well-being and inclusiveness, and safeguarding the environment.
• Sustainability: Greener and smarter buildings are part of the solution to environmental challenges, while the densification of real estate contributes to carbon emission reduction goals.

Indian cities’ performance

 The World’s Top 20 Most Dynamic Cities

India continues to dominate the highest rankings of the Index with Bengaluru (1st) and Hyderabad (2nd) maintaining their positions at the top of the table. There are another four major Indian cities in the Top 20 -Delhi (4th), Pune (5th), Chennai (7th) and Kolkata (15th). Meanwhile, Mumbai sits just outside the Top 20 (in 23rd); as a larger and more mature metropolitan economy, it has slightly lower momentum on several metrics compared to its Indian peers, but nonetheless is still impressive on a global scale. Bengaluru in first place globally has an established reputation worldwide for the design and development of technology and electronics. Along with attracting many international companies, it has a vibrant start-up culture; it is home to five of India’s eight Unicorns (companies valued over US$1 billion). Hyderabad, following closely in second place globally, is also home to many successful start-ups with a specific focus on ‘deep tech.’ India’s largest start-up incubator, ‘T-Hub’, is located in the city and is a public/private initiative between the city government, three educational institutions and the private sector.

 A common theme this year is that many of the top-performing cities have strong links to the technology and innovation sector.  The technology sector is a key driver of both real estate and economic momentum, and is propelled not only by the large dominant tech firms but also by a robust start-up culture.  Bengaluru, Hyderabad, Ho Chi Minh City, Shenzhen and Nairobi have all cultivated a thriving start-up culture which has helped to push them up the rankings.

Path to Long-term to Sustainable Movement Cities undergoing strong growth perform well in attracting companies, people and capital which in turn supports future economic and social development; however, it also creates challenges that cities must address to ensure this short-term growth transitions into longer-term sustainable momentum. Different cities take diverse development paths and real estate can play a significant role in ensuring long-term, sustainable growth. Urban transformation, placemaking, increased transparency and sustainability are all key factors in real estate’s contribution to this transition. Regeneration projects can dramatically transform the trajectory of a rapidly-growing city. New mixed-use developments can help nurture new businesses and improve lives. In parallel, large-scale infrastructure projects can combat problems such as congestion, while smart technology embedded within a city’s infrastructure can improve the flow of people. Transparency is vital in securing the long-term investment that leads to sustainable growth. By working with city governments, the private sector can play a major role in driving this change and bring benefits not only to the real estate market but also to the wider commerciality of a city. Improving transparency boosts investor interest  India’s top cities have been successful in recent years in drawing high levels of foreign direct investment (FDI), while structural reforms are also encouraging greater interest from foreign real estate investors who are seeking to tap into the country’s favourable growth dynamics. Transparency, a key requirement for international investors, is still lacking; however, India’s reform-driven government is moving forward with its agenda to improve real estate transparency and reduce corruption. The Real Estate Regulation and Development Act (RERA) is a notable highlight and the recent creation of a single national VAT system will boost the logistics sector and make for a more business-friendly environment. These positive strides bode well for further growth in real estate investment in India’s top cities, which is still well below the levels of other major emerging markets. The challenges of absorbing rapid growth Strong growth and rapid momentum in many Indian cities however, has gone hand in hand with rising concerns over an increasing lack of appropriate infrastructure, congestion and environmental degradation. Additionally, within the urban population, inequality levels are growing along with fears about affordability. For these cities to turn this momentum into sustainable robust economic growth, they need to concentrate on addressing these issues, and the first steps have already been taken. For example, in Hyderabad there has been a large-scale tree planting programme (TKHH) which aims to improve tree coverage in the state from 24% to 33%. In Pune, a three-line metro system is being developed and is due to open in 2021. This will aid connectivity and considerably increase public transport capacity.

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