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Vietnam

Ho Chi Minh City overtakes Silicon Valley in global ranking of city momentum

Cities in Vietnam and India feature strongly in the global top 10 in annual index from real estate consulting firm JLL


​Vietnam's Ho Chi Minh City and Hanoi have entered the global top 10 in JLL's City Momentum Index (CMI), coming in at second and eighth place respectively. This year Asian cities make up half of the top 10, with India's Bangalore grabbing the top spot for the first time, knocking London off number one place, which it has held for the previous two years.

The annual index covers 134 major business hubs across the globe, tracking the speed of change of a city's economy and commercial real estate market, and identifying cities with the most dynamic conditions.

"Our research shows that the Asia Pacific region is home to more than half of the world's 30 most dynamic cities and real estate markets, highlighting the rise of cities like Bangalore and Ho Chi Minh City as major hubs of commerce," says Dr Megan Walters, Head of Research, Asia Pacific at JLL. "Technology is becoming a major driver of momentum with several cities in Asia providing fertile environments for innovation and are successfully integrating into global networks."

According to the index, the world's most dynamic cities share the ability to embrace technological change, absorb rapid population growth and strengthen global connectivity.

The success of Vietnam's two major commercial hubs, Ho Chi Minh City and Hanoi, is underpinned by favourable demographics and significant foreign direct investment (FDI) as the government takes steps to liberalise the business environment.

In Vietnam, low costs, rapid consumer market expansion and economies transitioning towards higher-value activities have driven significant levels of FDI and the construction of office, retail and hotel stock to meet growing demand. Vietnam's Foreign Investment Agency registered FDI of more than US$11.2 billion in the first half of 2016, a surge of 105 per cent compared to the same period in 2015.

Meanwhile, in India, Bangalore has consolidated its position as a global tech hub, attracting a range of the world's leading technology firms, as well as nurturing successful start-ups. This is driving strong real estate demand which, backed by robust levels of rental growth, has propelled it to the top of the index.

However, strong momentum brings challenges as well as opportunities. Cities such as Bangalore and Ho Chi Minh City will need to work hard to absorb rapid growth in the face of increasing strains on infrastructure and rising environmental concerns.

The 134 cities covered by the CMI were assessed using 42 variables including recent and projected changes in city GDP, population, corporate headquarter presence, commercial real estate construction and rents. Other factors included education, innovation and environment.

To learn more about JLL's CMI, please visit JLL's Cities Research Centre.

City Momentum Index Rankings

Asia Pacific

1. Bangalore

2. Ho Chi Minh City

3. Shanghai

4. Hyderabad

5. Hanoi

6. Melbourne

7. Pune

8. Beijing

9. Sydney

10. Chennai

 

Global

1. Bangalore

2. Ho Chi Minh City

3. Silicon Valley

4. Shanghai

5. Hyderabad

6. London

7. Austin

8. Hanoi

9. Boston

10. Nairobi

 

 

– ends –

 

About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 70,000.  On behalf of its clients, the company provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

JLL has over 50 years of experience in Asia Pacific, with 34,000 employees operating in 92 offices in 16 countries across the region. The firm won 15 awards at the International Property Awards Asia Pacific in 2016 and was named number one real estate advisor in Asia at the 2015 Euromoney Real Estate Awards. www.ap.jll.com