How does your home town rate as a world city?

Does Your City Stink Or Rule On A Global Scale?

A major new report by JLL and London-based intelligence firm The Business of Cities has outlined a new global hierarchy of cities with interesting results for BrisbaneSydney and Melbourne.

The report, titled Globalisation and Competition: The New World of Cities, says that we are in a new era of city competition where the rigid global urban hierarchy is breaking down and smaller cities such as Melbourneand Brisbane are increasingly specialising in niche markets, enabling more cities to ‘go global’.

“This is fundamentally changing the geography of commercial property and has deep implications for real estate formats, assets and opportunities,” the report says.

The paper outlines three broad categories of cities: Established World Cities, Emerging World Cities, and New World Cities.

It says that Sydney is the only Australian city that falls into the category of Established World cities, while Brisbane and Melbourne are New World Cities.

Established Cities

According to JLL, Established Cities are the highly-globalised and competitive cities with the deepest and most settled concentrations of firms, capital and talent.

“Six cities stand out. The ‘Big Six’ include the traditional ‘super cities’ of London, New York, Paris and Tokyo, but more recently this quartet has been joined by Hong Kong and Singapore,” the report says.
city family urban suburb

“They have significant competitive advantages, but nonetheless are vulnerable to other dynamic gateway cities that are well positioned to capture spill-over demand, notably Seoul, Toronto and Sydney and, over the longer term, Shanghai.”

Established World Cities have been hugely successful in attracting real estate capital, and their attraction for sovereign wealth funds, institutions and high-net-worth individuals is so great that the ‘Big Six’ alone account for more than 20 per cent of total global activity.

However, to retain their competitive advantage, the report says these cities will need to implement bold urban transformation plans to support the shift to new types of economic activity and to ensure the efficient recycling of land.

Affordability has become a critical issue for cities such as London, New York and Hong Kong, not to mention Sydney, where there are pressing requirements for appropriately-priced and flexible urban business space for the expanding innovation economy.

A major boost to new residential supply is also crucial for maintaining their competitive edge.

The tables below shows that Sydney has the third highest level of real estate investment as a proportion of City GDP globally, while Melbourne is number 13 and Brisbane number 19.

JLL New World Investment Intensity

The table below shows that London not-unexpectedly has the highest amount of human capital of any global city, while Sydney is Number 8, ahead of major cities such as Tokyo and Berlin.

JLL Human Capital


New World Cities

‘New World Cities’ such as Melbourne and Brisbane are small or medium-sized cities that have a favourable infrastructure and liveability platform and deliberately specialise in a limited number of global markets.

“Brisbane, Melbourne and Boston are archetypal ‘New World Cities’ and display the obvious features of this category,” the report says.

“Many possess high-tech, innovation or research capabilities, such as Vienna, Munich and Tel Aviv.

Others like Barcelona, Berlin, Miami and Cape Town are cultural, entertainment and tourist hubs.”

It says that the majority of these cities feature at the top of quality of life and sustainability indices (e.g. Vienna, Auckland, Vancouver and Copenhagen) and have had notable success in attracting footloose capital, companies and talent.

“These cities are the home of many ‘millennials’; a demographic that is demanding less conventional real estate – with a preference for characterful properties and locations in vibrant mixed-use neighbourhoods,” the report says.

“Real estate will play a crucial role in building an alliance between businesses, universities and civil society.”

It says ‘New World Cities’ are proving to be particularly attractive for real estate investors who are, either implicitly or explicitly, taking into consideration issues of liveability, sustainability and technological prowess in their strategic decision-making.

The table below shows that Sydney and Melbourne were both among the world cities with the most greenfields investment projects.

JLL Greenfields Project

In a promising development for Australian cities, the report says that since the Global Financial Crisis, there has been no clear correlation between a city’s economic size and its growth capacity.

Large established cities, such as Tokyo, New York and Paris, all rank in the bottom third in terms ofgrowth, but many emerging megacities are growing rapidly.

At the same time, there is a huge range of performance among the middleweight cities, from the Chinese powerhouse of Tianjin at one end of the scale, to crisis-ridden Athens at the other.

Want more of this type of information?

Adam Di Marco


This article was recently featured on Adam is also a director of Brisbane-based investment, management and development firm, Marquette Properties.

'How does your home town rate as a world city?' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.



Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...