Manila joins ranks of top 30 cities of the world

Rapid urbanization needing more real estate, credible infrastructure

MANILA, Philippines – Manila was recently named one of the top 30 cities in the world and expected to be the focus of global commercial real estate activity in the next decade, according to a study by global real estate services firm JLL that assesses city competitiveness and the role of real estate.

JLL’s Global300 study periodically identifies 300 cities in the world that are the bedrock of global commercial real estate activity out of a total of over 1,600 major cities worldwide. These 300 cities are selected based on an Index of Commercial Attraction which measures an urban center’s economic and real estate power and status. Out of JLL’s Global300, the top 30 cities where real estate commercial activity is concentrated are further identified.

In 2014, the Global Top30 accounted for over 50 percent of total commercial real estate investment among the Global300 and included Manila for the first time. “The cities comprising the Global Top30 have remained broadly consistent since 2012 – Manila is a new entrant to the Top30, while Madrid has fallen out, which is symptomatic of the steady shift in the balance of real estate activity towards the Asia Pacific region,” said the 2014 update of the JLL Global300 study.

David Leechiu, JLL Philippines country head, noted: “Rapid urbanization is pushing Manila into becoming one of the largest cities in the world. As responsible individuals and corporate citizens, we need to understand what this means. In a nutshell, it is more people needing more real estate: but let me stress it is not just real estate by itself, but real estate that is adequately supported by infrastructure, and a thought-provoking, credible, sustainable, enforceable master plan.”

“This unprecedented real estate boom we are in has been going on for about 10 years, and in all likelihood will go on for the medium term. It demonstrates dramatic but real fundamentals supporting this economic growth: real and new jobs are being created, real and new wealth as well,” the study said.

The JLL Global300 study further noted that “globalization is propelling four cities into the realm of ‘Super City’ status – Tokyo, New York, London and Paris – an elite group that possesses a powerful combination of economic scale and influence, deep corporate bases, highly liquid real estate investment markets and large, diverse and high-quality commercial real estate.”

Tokyo, New York, Seoul, Los Angeles and London were identified as the world’s largest city-economies in the Global300 study.

Unsurprisingly, four of these cities excluding Los Angeles were also home to most corporate international headquarters. Four of the top five largest city-economies excluding Seoul were consequently also among the top five real estate investment markets.

The study explained that competition between cities for capital, corporations and talent has never been stronger. “There are now in excess of 1,600 major cities across the world… all jostling for global attention and looking for a winning edge.” The JLL Global300 study was established to allow investors “to make sense of the massive opportunities that rapid urbanization is offering the real estate industry.”

The Global Top30 list divided cities into super cities of which there were four; mature cities including US capitals like Chicago, Washington DC, San Francisco; and emerging cities led by Seoul, Shanghai, Beijing and lastly, Manila.

The JLL Global300 are derived from a weighted list of variables covering population, GDP, corporate presence, air connectivity, commercial real estate stock and real estate investment volumes.