9 March 2015
Successful cities are never still. They trim their sails constantly, reacting swiftly to the prevailing winds of urbanisation, globalisation and technological innovation, and to the changing demands and opportunities that arrive with them.
The ability of a city to adapt to change will be one of its defining measures of competitiveness, we wanted to try to capture this flexibility and speed of progress and the result was the creation of our City Momentum Index (CMI). Its broader focus meant we could begin to demonstrate both how and why certain cities were succeeding with the benefit of positive momentum behind them. Our latest CMI, now covers 120 major established and emerging business hubs across the world.
Does Europe have momentum?
Looking specifically at Europe, only two European cities –London and Dublin – are represented in the top tier of the global top 20 cities for city momentum.
That is not to say that the rest of Europe lacks dynamism. If we apply the same assessment to just Europe, all of the top 12 European cities for city momentum demonstrate significant pockets of dynamism and opportunity, despite Europe’s structural challenges.
These cities share common attributes such as high-value activities, technological prowess, robust governance, favourable business-operating environments and highly transparent real estate markets.
In fact, these factors make these 12 cities better equipped than most to adapt to new socio-economic and technological forces. Their qualities such as dynamic city governance, global connectivity, world class universities, business-friendliness and high-value industry clusters, are fundamental for generating longer-term momentum.
Technology – providing the jobs of the future and driving momentum
Technology is a major element, and a common factor driving momentum across the European top 12 cities.
London has topped this year’s CMI as the most dynamic city globally, boosted by robust economic fundamentals and its increasing status as a global tech hub.
The tech hubs in Munich (3rd) and Berlin (10th) are also benefitting from fast-growing high-tech sectors. Office space demand from the IT sector has increased significantly in both Munich and Berlin and is expected to assume an increasingly important role.
Dublin (2nd) has registered the fastest office rental growth globally over the past year, as tech giants such as Google and Facebook increase their presence and high-tech start-ups flock to the city to take advantage of Ireland’s low corporate tax rate and talent.
Livability, Core to Success
All three Scandinavian capitals – Copenhagen (4th), Stockholm (5th) and Oslo (8th) – feature in the European top 12. They are also among the world’s most liquid real estate markets, featuring in the top 10 cities of JLL’s Investment Intensity Index.
Together with strong high-tech sectors, the three cities score highly on livability measures. Dynamic, sustainable and scalable, they are attracting high levels of migration and investment.
Looking to the future
Having strong momentum presents cities with opportunities as well as risks. While the City Momentum Index highlights a city’s speed of change, it doesn’t necessarily hold that those cities at the top of the CMI will provide the strongest future performance of commercial real estate, or the most immediately attractive real estate investment environments – but they are certainly ones to watch. Many cities with strong momentum are currently facing issues of affordability and shortages of available real estate, while broader problems of congestion, social inequalities and environmental issues can often be magnified in cities with rapid change. In the rapidly changing hierarchy of cities, it’ll those that can adapt quickly and effectively that will secure their position.
A former urban planner and market analyst, Rosemary is an International Director at JLL, where she runs the firm’s Global Research programmes on World Winning Cities, Global Real Estate Transparency and Sustainability in Global Real Estate Markets.
Her main area of interest is in defining the next generation of “rising urban stars” and working with leading corporates, developers and investors on their global investment strategies and expansion plans.
Rosemary will be a panellist at MIPIM 2015:Leading Powerhouses Of The Future – MIPIM City Investment ForumTuesday 10th March 14:00 - 15:00, Grand Auditorium, Palais des Festivals
Cities Research Centre
City Momentum Index