Dubai: Dubai continues to be the most “dynamic” city within the Middle East for a second straight year in a global survey which ranks cities based on their real estate dynamic as well as related social-economic factors. But in the overall global charts, Dubai slipped from third spot to 13th, a decline brought about by the marked slowdown in its property market since the second half of last year.
The City Momentum Index put together by the real estate consultancy JLL ranked London first globally, followed by San Jose, Beijing, Shenzhen and Shanghai. It is interesting that Chinese cities were able to figure in the top tier despite the country’s real estate market passing through one of its toughest phases.
Apart from trends that show up in a city’s residential and commercial space, the other considerations the index takes into account are “the speed of change of a city’s economic base”. That would include air passenger traffic growth rates, the presence of new businesses and the ease with which they do so, as well as the levels of foreign direct investment a city attracts.
While the slower pace of growth of its property market explains the dip in terms of Dubai’s rankings, the longer term picture retains its buoyancy. A subdued rental market will offer some welcome breathing space for the city’s residents, as well as its corporate tenants. If the slowdown had not taken place last year, it would have only created an unsustainably hot property market.
“Dubai remains in the Top 20 global cities in terms of dynamism and pace of change, although its rank has dropped as growth in residential real estate prices moderates to more sustainable levels,” Craig Plumb, Head of Research at JLL Mena, said in a statement.
“We witnessed some new cities within the broader region, such as Nairobi and Bengaluru making their debut to the Top 20. Both are experiencing high levels of property construction, its rental markets are buoyant and real estate transparency is improving.” (In fact, it is also the first time Nairobi and Bengaluru have made it to the Top 20 in the index.)
According to Sameer Lakhani, Managing Director at Global Capital Partners, there could be further good tidings for businesses setting up operations or those international firms eyeing office space in Dubai. “A softer rental cycle is only just starting to show up for office tenants,” said Lakhani. “As such it could take a further few months for the impact to be felt.”