Abu Dhabi, Dubai “most resilient cities” in the Middle East

DUBAI – “ASWAQ”

Abu Dhabi and Dubai are the “most resilient cities” in the Middle East in terms of city wealth (GDP), personal wealth (households with an income greater than US$70,000), and demographics, according to ‘The Resilient Cities Index’, a new research by the global real estate advisor, Savills.

Abu Dhabi and Dubai are among the Top 30 “most resilient cities”, and will remain so till 2028. Savills' ‘Resilient Cities Index’ examined cities' ability to withstand or embrace the technological, demographic, and leadership disruption facing global real estate today and in 10 years' time.

According to Savills’ data, Abu Dhabi is currently rated 22nd “most resilient city” globally, higher than a decade ago when it was rated 25th. While the region's financial capital, Dubai, will see its rating improving one notch to 26th place in the next 10 years from the current 27th ranking. Kuwait City, Riyadh and Jeddah currently make up the other Top 5 “most resilient cities”, but by 2028, Riyadh is set to overtake Kuwait City.

Wealth Monitor’s managing director, Arshad Khan, said one key factor for any country is to keep up with the competition and quickly adapt and embrace new technologies and innovative approaches.

Khan said, "That way the UAE is good as they keep on adapting new technologies and innovative solutions. The UAE is far ahead in artificial intelligence, blockchain and other new-age technologies not just regionally but globally also.”

Khan added, "I would give top-most rating to the UAE's leadership and its vision. There is a continuity in the vision and implementation strategy. We are so much bullish about India just because there is a strong leadership.” He credited the UAE's leadership for bringing the country at par with the world's best cities and countries in socio-economic status.

The Middle East region is also home to the "challenger cities" identified in Savills’ research. The report specifically identifies Riyadh and Jeddah as among the eight that will make the biggest leaps up the ranking in the next decade, alongside the likes of Nanjing, Hangzhou, Delhi, and Mumbai. Savills’ Research rated Hangzhou, Riyadh, Nanjing, Ningbo, Delhi, Mumbai, Jeddah and Bengaluru as the top challenger cities.

Paul Tostevin, director in Savills world research, said, “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.”

"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 have 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," Savill revealed.

In the past decade, the number of cities with gross domestic product (GDP) of more than US$50 billion has grown from 177 to 248. By 2028, this number is expected to increase to 317. Those cities with GDP over US$50 billion accounted for 83 per cent of global GDP in 2018, an increase from 79 per cent a decade ago. This is forecast to increase to 89 per cent over the next 10 years as the importance of cities continues to accelerate.

Globally, within 10 years China cities are expected to occupy 43 spots in Savills’ Top 100 Resilient Cities ranking while New York, Tokyo, London, and Los Angeles are currently Savills’ Top 4 cities most resilient to global disruption now and in 2028.

Simon Hope, head of global capital markets at Savills, said, "The list of the world's top global cities may feel like it is 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."

The study also showed that investors looking for long-term returns would find growth in Middle Eastern, Indian, and tier-two Chinese cities, Savills explained, as their markets are “likely to grow in the face of global disruption” in the coming decade, but remain relatively untapped at present.

Commenting on the findings, Savills' world research director, Sophie Chick, said: “What our eight 'Challenger Cities' have in common 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.”

Chick added, "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.”