Real estate consultants City Momentum Index puts city as most improved due to growing economy and commercial real estate sector.
Ho Chi Minh City has been named the world’s most improved city in JLL’s City Momentum Index, due to its rapidly expanding economy and commercial real estate market.
High levels of foreign direct investment (FDI) and infrastructure spending have contributed to make it the biggest upwards mover, ranking at Number 6 overall out of 120 cities.
“Ho Chi Minh City has really started to pick up quite dramatically in the last two years due to a combination of improving economic conditions and more confidence coming back into the market,” said Mr. Stephen Wyatt, Country Head, JLL Vietnam. “We are seeing a lot of both local and foreign investors and developers trying to get a foothold in the city.”
Major infrastructure investments, including the city’s first metro line, are also helping to boost Vietnam’s GDP growth, which at 8 per cent is among the highest in the region.
The city attracted $506.3 million in investment in February, a 170.5 per cent increase against February 2014, according to government data. These factors are leading to a rapid increase in connectivity, with air passenger numbers increasing by over 11 per cent annually over the last five years.
As companies look beyond China as a base for manufacturing, Vietnam is becoming an increasingly attractive destination for multinational companies, the report stated. Samsung’s $1.4 billion new facility at the Saigon High Tech Park underlines the rising interest among foreign investors.
The city’s strong performance has been boosted by some of the world’s highest levels of office space construction and absorption levels, although growth rates are exaggerated by the small size of the existing commercial property market.
The biannual report tracks established and emerging business hubs across the globe. It gauges a city’s short-term socio-economic and commercial real estate momentum over a three-year horizon in combination with measures of “future-proofing”, meaning whether a city has the essential ingredients to ensure longer-term sustainable momentum in terms of education, innovation, and environment.
JLL City Momentum Index 2015
2) San Jose
6) Ho Chi Minh City
9) San Francisco