Emerging global cities have established themselves as centres of finance, business services and retail. These cities are at the crossroads of serving the domestic market and enjoy strong exposure to the global economy. New World Cities also stand out and have gained a competitive advantage on the global stage because of their innovation capabilities, lifestyle or brand and influence.
“It’s an interesting time for global real estate investments and capital flow trends as a number of different factors are at play when it comes to the attraction of cities. Abu Dhabi and Dubai have both capitalised on the ease of doing business within the cities and the governments continue to launch numerous initiatives to stimulate demand and create an attractive investor environment,” says Dana Salbak, Research Director at JLL MENA.
The report reveals that economic fundamentals are no longer a city’s main draw for corporate occupiers and investors but, quality of life, innovation, sustainability, governance and resilience increasingly factor into location and investment decisions. Cities that adapt to new economic models, such as the innovation economy, experience economy, sharing economy and circular economy, will enjoy new sources of real estate demand and attract higher cross-border investment.
The UAE continues to lead in the Middle East as a country rated for the ease of doing business, featuring 16th out of 190 countries in the World Bank’s Ease of Doing Business ranking 2020*. Numerous government initiatives have been launched in both Abu Dhabi and Dubai to stimulate demand in the commercial sector. Dubai also offers an attractive entrepreneurial environment where businesses can operate out of multiple free zones through a single license under the “one free zone passport” scheme.
Quality of life is also a strong brand asset for Abu Dhabi and Dubai supported by public governance and high-quality services particularly in the transport and infrastructure industries, world-class healthcare and education systems. This is supported by a growing Arts & Culture community such as the Cultural Foundation in Abu Dhabi and Alserkal Avenue in Dubai where creative hubs for art, culture and lifestyle, contribute to the city’s cultural offerings.
“Investors should keep in mind not just economic fundamentals and current performance cycles when making investment decisions, but also the standard of living and other aspects of quality, innovation, sustainability and safety,” Dana continued.
According to the report, cities that manage to adapt and change will maintain their global competitiveness. This in turn will encourage new living and working patterns, which will result in an increase in demand for real estate from cross-border investment and occupiers.
Several new economic models are shifting attention to how cities build a customer service culture, foster urban experiences, expand innovation industries and achieve sustainability.
“Global cities are being judged on a wider set of competitive criteria, including their ability to attract and accommodate new forms of value creation,” says Dr. Tim Moonen, Managing Director at The Business of Cities. “The dividends to asset holders in cities that can successfully adjust to these new trends are becoming increasingly apparent.”