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With almost half the world’s wealth located in emerging countries, Cityscape looks at the changes which have led emerging world cities to take on international and commercial roles

August 2015

London, New York, Tokyo and Paris have long been identified as the quintessential world cities. Yet today larger and faster growing emerging cities are taking on similar functions.  Latest figures reveal that almost half the world’s wealth is now located in emerging countries. These emerging countries are creating opportunities that cultivate investment, boost the economy and create a wealth of jobs. According to JLL there are now 135 metropolitan areas worldwide with nominal GDP above USD 100 billion, nearly half of which is located in the emerging world.

With cities morphing and reinventing and with businesses globalising – real estate investors, developers and corporate occupiers are increasingly drawn to cities that offer new strengths, those that are likely to secure jobs of the future and those that are competitive, resilient and financially savvy.

For JLL there has never been a more important time to understand city performance amidst the backdrop of this shifting economy. “The ability of cities to attract investment, manage their growth and deliver quality of life will define the character and, ultimately the success of the metropolitan century,” according to the recent Business of Cities report from JLL.


According to the Business of Cities group research identifies a vanguard of emerging world cities, which includes the financial centres of the BRIC countries – Moscow, Mumbai, Sao Paulo and Shanghai – and a further 20 cities in Latin America, Eastern Europe, Africa, East and South East Asia.

Jonathan Couturier of Business of Cities, an intelligence and strategy firm that reports on global trends, explains the causes of the shift.

“The search for lower costs, new markets and new ideas are causing the shift along with a huge rise in disposal income and urban consumers in emerging cities. In addition, within emerging cities companies are more effective at inserting themselves in global value chains. There is cheap finance, more risk appetite and commodity windfalls,” says Couturier.

“Some emerging cities have made extraordinary progress in a very short space of time. As a group, these cities face a specific and unique set of challenges – including around land-use, transport, public services, regulation and open-ness – if they are to make the jump to global city status that Seoul, Hong Kong and Singapore achieved in previous cycles,” says Couturier.

The International Monetary Fund (IMF) believes that the resilience of emerging and developing economies is not a recent development, but the result of steady gains in performance over the past two decades. “These economies are now spending more time in expansion, and their downturns and recoveries have become shallower and shorter than advanced economies. This was true not just for emerging markets, but for low-income countries as well.”

For the IMF emerging economies have become better at policymaking. “More of them have adopted inflation targeting and flexible exchange rates, for example, and their fiscal and monetary policies are now more ‘countercyclical’ than in the past—that is, they stimulate the economy when it is weak, and rein it in when it is overheating,” says the group.

Walter Boettcher, Chief Economist for EMEA at Colliers agrees. He believes that urbanisation is becoming an important force in the emerging market.

“Emerging markets have had very high growth rates for many years, far exceeding the growth rates of Western Europe and the U.S. I’m not convinced it is a new phenomenon. More importantly, how long must the emerging markets emerge before it is considered emerged or developed? We have now reached a stage where emerging markets have become self-sufficient and reliant on domestic demand. ”


While Africa, one of the largest continents in the world is partly responsible for the shift in economy, may not feature on JLL’s ‘Big Movers’ list (a list of powerful emerging cities) in the Business of Cities report for this year, the property consultant notes that it is a continent with huge potential and one to watch out for.

“Historically Africa has been quite peripheral to the shift in economy; however that has begun to change in the last three-five years. Now, 10-15 cities are driving the continent’s modernisation, openness and connectedness,” says Jeremy Kelly, Director, JLL Global Research.

According to Kelly China’s increasing demand for resources has created a big windfall for sub-Saharan Africa and the demand has led to large scale Chinese investment.

“We are seeing different types of African cities emerging such as Johannesburg in South Africa representing a financial centre and Lagos and Nairobi becoming logistic and innovation hubs. There are also cities that are focused more on inclusive quality of life which include Cape Town and Accra. Lastly, we are seeing cities that hold future opportunity these include Addis Ababa, Casablanca and Algiers,” says Kelly.


While previously there was a lack of data on emerging cities, the impact of entrepreneurship is now visible. JLL’s Business of Cities report identifies the following emerging cities in the world:


This sprawling, densely populated Indian city plays a major role as a financial centre and is known as having the most globalised city economy in South Asia. According to Rosemary Feenan, Director of JLL Global Research, the city featured 53 on Z/Yen’s Global Financial Centres Index (a commercial think tank based in London), emerging top in South Asia and eight places up since 2014.

“This city is an innovation hub. While there are many positives, the city is constrained by governance, co-ordination and infrastructure issues,” she says.


Over the last decade Dubai has emerged as the global financial hub according to Feenan. It was placed 23rd on Z/Yen’s Global Financial Centres Index but the city has strong competition from other GCC cities including Riyadh, Abu Dhabi and Doha.

“It’s an innovation and talent base and a geopolitical rock of stability for investors in an era of regional turmoil. Dubai attracted real estate investment after the post financial crisis despite wider region problems. There is also the presence of large global companies, such as PwC and Google,” says Feenan.


With a diversified economy (e.g. manufacturing 23% of urban GDP, compared to 14% Tokyo, 4.5% London; Transportation 11.2% vs. 2.2% in New York), Seoul represent strong and growing innovation potential for Asia.

“It has a rapidly improving urban fabric, improved global perceptions and it is an increasingly popular destination for tourism. It was ranked 13th globally for international arrivals according to Euromonitor, a 3% increase over the 2012/13 period, on top of a 5% increase between 2011-12,” says Kelly of JLL.


The city has made investments in liveability with the development of the undersea Marmaray tunnel, new highways and boulevards, new shopping centres, third Bosporus Bridge, metro and tram extensions.

“Istanbul has economic diversification and growing financial hub, a good balance between manufacturing (16%), business and finance (28%), trade and tourism sectors (18%). In addition, it is a regional innovation hub and has very strong demographic profiles, with the population growing 13% since 2000 and over 25% of the population under the age of 30,” says Kelly.

For Boettcher Istanbul is a classic example of an emerging market whose domestic economy has taken off and formed its own critical mass. “It’s trans-shipment point. Its strategic location between Asia minor and Europe provides interesting opportunities for expansion.”


According to Boettcher Moscow is a gateway to the development of all second tier cities in Russia. “It’s an entry point. All services across sectors are underprovided in most of the secondary cities and Moscow being the leading financial centre seems to be well positioned to set up a platform to do development work,” he says.


In terms of the top cities, London ranks number one, not only because it is the global capital of real estate investment, but also because it is Europe’s most dynamic region for jobs and growth over the entire post-crisis cycle.

“London is the only city in the EU among the top 100 fastest-growing metropolitan areas (of 300 globally). It continues to benefit from a cycle of investment that has enhanced its gateway functions, transport infrastructure and cultural vibrancy relative to its competitors,” says the report.

New York, Paris, Hong Kong, Singapore, round up the top five.

“These cities remain attractive to investors due to each country’s framework, law, rules, political stability and standards and language. The cities have had a long record of investment in key assets and have developed reputations as safe havens. With a record of tolerance and diversity and range of sills, information and experience, these cities remain attractive,” says Couturier.