Ho Chi Minh City (2nd) and Hanoi (8th) have made rapid progress and now sit in the Global Top 10.
“Their success has been underpinned by favorable demographics and significant FDI as they take concrete steps to liberalize their business environments,” the report stated.
Ho Chi Minh City is one of the world’s most dynamic urban economies with low costs, rapid consumer market expansion, and a transition towards higher-value activities driving significant levels of FDI and the construction of office, retail and hotel stock to meet demand.
This transition is at an early stage, however, and traffic congestion remains a serious impediment to quality of life and productivity levels, which are needed to ensure future momentum.
Meanwhile, Hanoi is seeing vigorous economic growth, with strong increases in population and incomes driving its retail and residential sectors.
The office sector is also experiencing high levels of development, and real estate investment into the city reached exceptional levels in 2016, buoyed by a nearly $400 million office deal.
A lack of world-class higher education institutions and technology skills may slow the transition towards higher-value activities, however.
The Asia-Pacific region is shown in the CMI 2017 as home to more than half of the world’s 30 most dynamic cities and real estate markets, which is testament to the rise of the region’s cities as major hubs of commerce and innovation.
The analysis also draws attention to several high-energy cities, such as Ho Chi Minh City, Nairobi, Manila and Chennai, which are riding a wave of robust short-term economic and real estate momentum.
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.
JLL created the City Momentum Index in 2014. It has since been updated annually and coverage has been extended from 111 cities in 2014 to 134 cities in the 2017 edition.
There has been a high level of change in the CMI rankings as momentum has ebbed and flowed across the globe.
For example, in 2014 and 2015 the top ranks were dominated by cities in Greater China, whereas more recently, cities in India and Vietnam have come to the fore. Only three cities – London, Shanghai, and Silicon Valley – have appeared in the Global Top 10 in all four editions, while San Francisco and Boston have featured in three editions.
-VN Economic Times