ABU DHABI 19 June, 2019: Abu Dhabi has been named the most resilient city in the Middle East, according to research by a global real estate advisor.
The United Arab Emirates capital featured highest in the Savills Resilient Cities Index, launched as part of its Impacts research programme, which examines which cities will be able to withstand or embrace the technological, demographic, and leadership disruption facing global real estate today and in 10 years’ time.
Figure 1 – Highlighted Middle East Cities by their global resilience ranking
Courageous investors looking for long-term returns should look to Middle Eastern, Indian and second tier Chinese cities, as the markets that are likely to grow in the face of global disruption in the coming decades, but today remain relatively untapped, says Savills.
These regions are home to the ‘challenger cities’ identified in Savills Resilient Cities Index. The report specifically identifies Riyadh and Jeddah as among the eight ‘challenger cities’ that will make the biggest leaps up the ranking in the next decade. New York, Tokyo, London and Los Angeles are the top four most resilient cities today, and will remain so in 2028 according to Savills.
- Abu Dhabi named most resilient city in the Middle East – Dubai, Riyadh, Jeddah and Kuwait City also within top 50 most resilient global cities
- Cities in India, China and the Middle East growing more resilient and offer investors long-term opportunities – within 10 years China will occupy 43 spots in Savills Top 100 Resilient Cities ranking
- New York, Tokyo, London, Los Angeles currently Savills top four cities most resilient to global disruption now and in 2028, but ‘challenger cities’ rising fast.
‘Challenger cities’ are poised to compete with established cities by using disruption to their advantage as they are often able to respond faster and more flexibly to swift changes in technology and society, says Savills, and are therefore ones to watch by real estate investors ready to take a long-term view. No contenders from either the US or Europe have been awarded ‘challenger city’ status by Savills, with London and Paris the only European cities ranked within the 20 most Resilient Cities Index.
Figure 2 – Challenger Cities, the locations forecast to jump at least 10 places and enter the top 50 Resilient Cities Index by 2028, according to Savills Impacts. (Bengaluru wasn’t featured in the 2008 ranking as it had a GDP <$50bn.)
“What our eight challenger cities have in common,” says Sophie Chick, director in Savills world research, “is that they are all likely to see substantial increases in their GDP and growth in household incomes, while their dependency ratios – the proportion of people of a non-working age to those of a working age – will either fall or increase at a lower rate than other major cities between now and 2028.
This indicates that they are set to be young, prosperous, and able to adapt to changes in the way the world operates at a faster pace than some better known locations.”
Figure 3 – Savills Resilient Cities Index: the top 20 most resilient cities in the next 10 year
Simon Hope, head of global capital markets at Savills, comments: “The list of the world’s top global cities may feel like it’s almost set in stone, but, as is becoming apparent, disruption is on the menu and we are set to see some sweeping changes to the way society functions and how businesses operate in the next 10 years.
“For real estate investors, our Resilient Cities Index shows that the long-established global cities will withstand much in the next decade, which is why they’ve seen high levels of investment as they are perceived as ‘safe havens’ for capital, with the top 10 global destinations for both domestic and cross-border capital in 2018 reflecting this old world order. However, as a result, their real estate assets have become correspondingly expensive and highly sought after.
“As such, our eight ‘challenger cities’ may offer alternative investment destinations. While not without risk, these cities are set to accelerate up the ranks as they demonstrate their resilience to the challenges ahead and investors should start investigating how to secure a footing in these markets if they’re willing to sit tight and take a long-term view.”
Paul Tostevin, director in Savills world research, adds: “All our ‘challenger city’ contenders are from China, India and the Middle East. While some of these, such as Delhi, Mumbai, Bengaluru, Riyadh and Jeddah are known internationally, they are generally yet to make it onto the global real estate investors’ radar.
“Those in China – Hangzhou, Nanjing and Ningbo – aren’t well known at all, despite having large populations. What all of them have in common, however, is that they have young populations, are increasing in prosperity and should be able to swiftly pivot in response to the disruption lying ahead.”
