Dubai is expected to jump up the list of most influential global cities by 2020 but New York and London will remain on top, Knight Frank has said in a new report.
Following a tough past 18 months in which key conglomerate Dubai World had to restructure debts of nearly $25bn and house prices have dropped by up to 50 percent, the city has fallen to 32nd in Knight Frank’s Global Cities Index for 2011.
The rankings, based on economic activity, political power, quality of life and knowledge and influence, showed Dubai had fallen one place compared to the previous year.
A total of 40 cities were assessed in the report.
But in its predicted rankings for 2020, which form part of Knight Frank’s Wealth Report 2011, Dubai will jump to 11th in the global table.
New York and London – which held the top two places in the 2011 list – will continue to dominate as global cities in 2020, Knight Frank added.
The Wealth Report also measured the 2010 real estate performance of 85 cities within the 40 countries assessed in the global cities list.
It showed prices in Dubai were down 10 percent, giving the emirate a ranking of 82nd. Abu Dhabi, with a price drop of two percent, were 58th in the list.
“In much of the Middle East, and most obviously in Dubai, governments are working hard to underpin their residential markets with new investment in infrastructure and employment opportunities,” Knight Frank’s report said.
Dubai’s real estate market suffered more than many during the global recession as a glut of unsold developments, both residential and commercial, dragged heavily on prices already under pressure from a sharp slowdown in investor activity, it added.
The 2011 Wealth Report showed that New York and London are seen by high net worth individuals (HNWI) to remain the world’s leading hubs over the next 10 years, but emerging nation centres – such as Mumbai, Shanghai and Sao Paolo – catching up.
It added that Monaco remained the most expensive residential location in the world, followed by London.
Andrew Shirley, editor of The Wealth Report said: “The collective worth of the global HNWI community increased by 22 percent last year so it is not surprising that many of the world’s luxury property markets benefited.
“However, it is not just wealth creation that is ensuring that the international prime property market contains players from more countries than ever before. As we have seen recently in North Africa and the Middle East, a number of major geopolitical shifts are now playing out around the world. These all serve to enhance the desirability of true global centres, like London and New York.”