India is home to six of the world’s 30 most dynamic cities. In JLL’s City Momentum Index (CMI) 2017, the country’s primary IT and technology hub, Bengaluru, sits at the top. It is followed by Hyderabad at No 5, Pune at No 13, Chennai at No 18, Delhi at No 23 and Mumbai at No 25.
Among the most densely-populated areas on earth, these cities have shown the fastest change on key parameters, to emerge in the global top league.
India has not only taken over from China as home to the world’s most dynamic cities but also knocked off London from the top position that it had strongly held on to, for the last two years. After helping India debut on the CMI Top 20 technology-rich cities last year, Bengaluru staved off strong competition from Silicon Valley to Nairobi this year, with technology and innovation underpinning its top position.
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Bengaluru and Hyderabad’s reasons for success
Along with Hyderabad, Bengaluru also led the rise of agile emerging world cities figuring with best-in-class examples, such as Shanghai, Shenzhen and Dubai.
Being India’s leading IT hub, Bengaluru has attracted a range of the world’s leading technology firms, apart from nurturing successful start-ups. This is driving strong real estate demand, which, backed by exceptional levels of growth, has propelled the erstwhile ‘Garden city’ to the top of this index.
Similarly, Hyderabad has attracted major investments from the likes of Microsoft, Apple and Uber, as a national technology centre. The city’s leadership has been instrumental in enabling Hyderabad to keep pace with Bengaluru – helping to set up India’s largest incubator, focusing on specific niche industries such as gaming and animation and building business attractiveness. All of these helped the ‘city of pearls’ to the global top five.
However, ensuring that infrastructure keeps pace with the city’s rapid development is expected to remain a priority for the city. After several deferments, the Hyderabad metro system is set to open in 2018. Similarly, Bengaluru faces challenges in maintaining its momentum, with infrastructure deficits and room for further improvements in market transparency.
Chennai, Delhi, Mumbai and Beijing feature in the Top 30 but their positions are compromised by poor scores on environmental sustainability.
Why other global cities slipped in their rankings
Affordability and space constraints are hindering momentum in some cities. For example, San Francisco that has fallen out of the Top 20 for the first time, and Hong Kong could not make it to the top group partly due to supply constraints stifling momentum. Tokyo and Seoul, which were in the Top 20 in CMI 2016, have fallen out of the top positions, ranking in the mid-30s. While both cities finish in the top 10 on long-term momentum, they have disappointed on short-term economic and real estate momentum during 2016. Singapore failed to make the top cut due to a continuing correction in office and retail rents and sluggish net absorption. Meanwhile, its long-term strengths are in part offset by a slowdown in labour force growth. Overall, however, the rise of Asia-Pacific region’s cities, shows how they are major hubs of commerce and innovation.
(The writer is COO and international director, JLL India)