• JONES LANG LASALLE INDEX:

    Manila ranks 19th ‘most dynamic city’

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    Manila occupies the 19th spot among the “world’s 30 most dynamic cities” for commercial real estate investment in 2017, real estate services giant Jones Lang Lasalle (JLL) said in its annual City Momentum Index (CMI) released late last week.

    JLL noted that this was the first time Manila has appeared in its ranking, which the firm has published annually since 2014.

    “Manila (19th) appears in the Global Top 30 for the first time, with a particularly dynamic office market supported by a growing and globally competitive BPO sector,” JLL said.

    A JLL representative clarified that “Manila” in the report refers to the whole of Metro Manila, or the National Capital Region.

    The Index ranks 134 world cities on 42 indicators grouped into three broad sub-indices, the JLL report explained.

    GAINING MOMENTUM Manila is among the world’s top 30 “most dynamic cities,” according to global real estate services firm Jones Lang Lasalle’s annual City Momentum Index for 2017. PHOTO JONES LANG LASALLE

    “The world’s most robust, agile and open cities are generating considerable momentum and energy, and are taking the lead in shaping our future landscape,” with most of them outperforming their national economies, JLL said in defining what makes a “dynamic” city.

    Cities were assessed on socioeconomic momentum, which relates to changes in city GDP (gross domestic product), population, numbers of air passengers, corporate headquarters located in or moving to the city, and foreign direct investment (FDI).

    Commercial real estate momentum was also analyzed, and addresses “changes in absorption, construction, rents, investment volumes and real estate transparency covering the office, retail and hotel sectors,” the report explained.

    Finally, long-term momentum, or what JLL also called “high-value incubators” was also rated. “This is an outlook on the ability of the underlying attributes of a city to maintain momentum over the longer term (i.e. its future-proofing capacity) in terms of education, innovation and environment,” JLL said.

    While 134 cities are reviewed, the final report of the City Momentum Index focused only on the top 30 in the final rankings.

    ‘Emerging megacity’
    Manila, along with the Indian cities of Mumbai, Chennai, and Delhi, was described as an “emerging megacity” by JLL.

    “The ‘Emerging Megacities’ of Delhi, Mumbai, Chennai and Manila are leveraging their dynamic labor markets to drive momentum,” the report said. “Growth in domestic corporations and FDI into areas such as business process outsourcing (BPO) is helping to fuel among the fastest economic growth out of all the CMI cities.”

    The report did point out, however, “This group faces significant infrastructure and quality of life issues, with high levels of inequality, congestion and pollution hindered by weak city governance.”

    Longer-term uncertainty
    In terms of its ranking in the three sub-indices, Manila scored highest in “commercial real estate momentum,” capturing the number 8 spot out of the 134 cities analyzed. Manila also ranked highly in terms of “socioeconomic momentum,” ranking 24th out of 134, but was ranked relatively low in terms of “long-term momentum,” in 107th place, which the CMI report suggested was an indicator of uncertainty over whether the city’s growth momentum can be sustained.

    The report explained that Manila was among “several high-energy cities” (others were Ho Chi Minh City, Nairobi, and Chennai) that “are riding the wave of robust short-term economic and real estate momentum.”

    The report continued, “Raw demographic and economic energy will continue to propel these cities forward, but to ensure longer-term success they will need to adapt to the new economy in terms of innovation and infrastructure.”

    Other rankings
    The CMI report pointed out that some cities that have regularly appeared high in the list of Top 30 have slipped down the list, most notably Hong Kong, Singapore, Tokyo, and Seoul. In the case of the latter two cities, short-term economic uncertainty and stagnant commercial property markets were blamed, while negative rent growth in Hong Kong and a shrinking labor force in Singapore were largely responsible for their declining attractiveness.

    The top 5 cities in the 2017 CMI ranking were Bangalore, Ho Chi Minh City, Silicon Valley (California), Shanghai, and Hyderabad. Hangzhou, China, Los Angeles, Dublin, Ireland, Nanjing, and Stockholm rounded out the bottom of the Top 30 cities list.

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