New York, London And Los Angeles Are Among The World’s Most Resilient Cities, But Power Is Rising In The East
When it comes to being able to withstand or embrace the technological, demographic and leadership disruption facing global real estate today and in 10 years’ time, New York, London and Los Angeles are among the world’s most resilient cities, according to Savills.
In its Resilient Cities Index Savills awarded New York the top spot and put London third and LA fourth behind Tokyo. Chicago came in sixth and Dallas 10th.
However, Savills said that over the coming decades the cities rising fastest up its index would all come from Asia and the Middle East, as these regions grow in wealth and importance, and offer good opportunities for international real estate investors.
These “challenger cities” are poised to compete with established cities by using disruption to their advantage as they are often able to respond faster and more flexibly to swift changes in technology and society, and are therefore ones to watch by real estate investors ready to take a long-term view, Savills said.
The eight cities it identified are Hangzhou, Nanjing and Ningbo in China; Delhi, Mumbai and Bengaluru in India; and Riyadh and Jeddah in Saudi Arabia.
No contenders from either the U.S. or Europe have been awarded challenger city status by Savills, with London and Paris the only European cities ranked within the 20 most Resilient Cities Index.
“The list of the world’s top global cities may feel like it’s almost set in stone, but, as is becoming apparent, disruption is on the menu and we are set to see some sweeping changes to the way society functions and how businesses operate in the next 10 years,” Savills Head of Global Capital Markets Simon Hope said.
“For real estate investors, our Resilient Cities Index shows that the long-established global cities will withstand much in the next decade, which is why they’ve seen high levels of investment as they are perceived as ‘safe havens’ for capital, with the top 10 global destinations for both domestic and cross-border capital in 2018 reflecting this old world order. However, as a result, their real estate assets have become correspondingly expensive and highly sought after.
“As such, our eight ‘challenger cities’ may offer alternative investment destinations. While not without risk, these cities are set to accelerate up the ranks as they demonstrate their resilience to the challenges ahead and investors should start investigating how to secure a footing in these markets if they’re willing to sit tight and take a long-term view.”
China is really the place to watch, Savills said. The potential there is undeniable.
“One in five people in the world are Chinese and as their economy continues to grow they will through the effluxion of time become the world’s largest economy, so in particular our Chinese ‘challenger cities’ will offer a wealth of opportunity,” Hope said.