Top Ten Cities to Invest in a Rapidly Urbanising World

Knowing where to invest is inevitably linked to population growth as well as supply and demand economics. With this, one must consider (when looking to invest) the availability of finance and ability to exploit the power of leverage – i.e. loan to value available, interest rates on offer. The above establishes these important factors as key reasons for companies, organisations, shareholders and individuals to invest within targeted cities. So, does this proven strategy remain safeguarded in a world that is rapidly urbanising? Absolutely!

Half of the world's 6.7 billion people are expected to live in urban areas by the end of 2008 for the first time in world history, as projected by the United Nations. The world population is expected to increase by 2.5 billion by 2050, to 9.2 billion, by which time, urban population is expected to rise from nearly 3.4 billion in 2008 to 6.4 billion in 2050. The urban regions thus will absorb most of the world's population increase in the next four decades while drawing on some of the rural population as well and there will be 600 million fewer inhabitants in rural areas by 2050.

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Source: http://rs.resalliance.org/2007/01/13/global-urbanization/

Rapid urbanisation is usually associated with economic success. An increasing concentration of people in urban areas lowers unit costs for many forms of infrastructure and services that improve health, for example. Rapid urban growth has also brought a huge increase in the number of large cities, including many that have reached sizes that are historically unprecedented. Only two centuries ago the only cities with a million inhabitants or more were London and Beijing. This increased to 80 cities by 1950 and it stands today at a staggering 300, which are mainly in Africa, Asia, and Latin America.

Cities reaching a population of ten million or more inhabitants are a recent phenomenon and have been labelled as ‘mega-cities’. New York was the first city to reach this size back in 1940, and by 1990 this number had increased to 12 (in Asia, Latin America and the US). In the last 200 years the average size of the world’s largest cities has grown from 200,000 inhabitants to over 5 million. These statistics give the impression of rapid urbanisation that is primarily focused on large cities.

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Source: United Nations, DESA, Population Division.World Urbanization Prospects: The 2005 Revision

The Top Ten countries with largest population are:

1. Mumbai – 13,663,885 inhabitants, formerly Bombay, is the capital of the Indian state of Maharashtra. With an estimated population of 13.66 million, it is the second most populous city in the world behind Shanghai. Along with the neighbouring suburbs of Navi Mumbai and Thane, it forms, at nineteen million, the world's fifth most populous metropolitan area. Mumbai lies on the west coast of India and has a deep natural harbour. Mumbai's port handles over half of India's maritime cargo. Mumbai is the commercial and entertainment centre of India, generating 5% of India's GDP and accounting for 25% of industrial output, 40% of maritime trade, and 70% of capital transactions to India's economy.

Mumbai is one of the world's top ten centres of commerce by global financial flow, home to such important financial institutions as the Reserve Bank of India, the Bombay Stock Exchange, the National Stock Exchange of India and the corporate headquarters of many Indian companies and numerous multinational corporations. The city also houses India's Hindi film and television industry, known as Bollywood. Mumbai's business opportunities, as well as its high standard of living, attract migrants from all over India and, in turn, make the city a potpourri of many communities and cultures. (http://en.wikipedia.org/wiki/Mumbai)

2. Karachi – 12,130,000 in habitants, is the provincial capital of Sindh province and the largest city in Pakistan. In terms of population, it is one of the largest cities in the world[4], and is Pakistan's premier centre of banking, industry, and trade. Karachi is also the home of Pakistan's largest corporations that are involved in entertainment, publishing, software development, medical research. It also serves as a major hub of higher education in South Asia, and the wider Islamic World. Karachi was the original capital of Pakistan until the construction of Islamabad, and is the location of Karachi Port, one of the regions largest and busiest ports.

The city's population has since increased dramatically after the partition of British India forced hundreds of thousands of Urdu and Gujrati speaking "Mohajirs"(refugees) to settle in the city. Since independence from Britain in 1947, the city's vibrant economy has attracted migrants from all over Pakistan, and beyond. Despite a history of political turmoil, the city continues to attract those seeking prosperity. Karachi city is expansive, and is over 3,530 square kilometres (1,363 sq mi) in area. It is locally known as the "City of Lights" (روشنين جو شهر) for its liveliness, and the "City of the Quaid" (شهرِ قائد), having been the birth and burial place of Quaid-e-Azam Muhammad Ali Jinnah, the founder of Pakistan, who also made the city his home after Pakistan's independence. People of Pakistan also called Karachi a "Mini-Pakistan" because all major ethnic group of Pakistan lives in the city. (http://en.wikipedia.org/wiki/Karachi)

3. Istanbul – 11,372,613 inhabitants, is Europe's most populous city (the world's 3rd largest city proper and 21st largest urban area) and Turkey's cultural and financial centre. The city covers 27 districts of the Istanbul province. It is located on the Bosphorus Strait and encompasses the natural harbour known as the Golden Horn, in the northwest of the country.

It extends both on the European (Thrace) and on the Asian (Anatolia) side of the Bosphorus, and is thereby the only metropolis in the world which is situated on two continents. In its long history, Istanbul served as the capital city of the Roman Empire (330–395), the East Roman (Byzantine) Empire (395–1204 and 1261–1453), the Latin Empire (1204–1261), and the Ottoman Empire (1453–1922). The city was chosen as joint European Capital of Culture for 2010. The historic areas of Istanbul were added to the UNESCO World Heritage List in 1985. (http://en.wikipedia.org/wiki/Istanbul)

4. Delhi – 11,325,124 inhabitants, is the second largest metropolis in India, with a population of 17 million, and a federally-administered union territory officially known as the National Capital Territory of Delhi (NCT). Located on the banks of the Yamuna River in northern India, it is one of the oldest continually inhabited cities in the world. Delhi has been the capital of several ancient Indian empires and a major city along the old trade routes between northwest India and the Indo-Gangetic Plains. It is the site of many ancient and medieval monuments, archaeological sites and remains.

The Mughal emperor Shahjahan built the city, now known as "Old Delhi", to serve as the capital of the Mughal Empire from 1649 to 1857. After the British Raj took control of India during the 19th century, Calcutta became the capital until George V announced in 1911 that it was to move back to Delhi. A new capital city, New Delhi, was built during the 1920s. When India gained independence from British rule in 1947, New Delhi was declared its capital and seat of government. As such, New Delhi houses important offices of the federal government, including the Parliament of India. Owing to the immigration of people from across the country, Delhi has grown to be a cosmopolitan city. Its rapid development and urbanisation, coupled with the relatively high average income of its population, has transformed the city. Today, Delhi is a major cultural, political, and commercial centre of India. (http://en.wikipedia.org/wiki/Delhi)

5. São Paulo – 10,886,518 inhabitants, is the capital of the state of São Paulo, Brazil. The city is the largest in Brazil and first in South America by population. It is located in the South East of the country. It is also the richest city of Brazil. The name means Saint Paul in Portuguese. The city has an area of 1,523 square kilometres (588 sq mi) and a population of 10,886,518, which makes it the most populous in Brazil, in South America and in the southern hemisphere.

Greater São Paulo, which includes adjacent municipalities, has a population close to 20 million, making it the third largest in the Americas, and one of the largest metropolitan areas in the world. People from the city of São Paulo are known as paulistanos, while paulistas designates anyone from the whole of São Paulo state, including the paulistanos. The city's Latin motto is Non ducor, duco, which translates as "I am not led, I lead". A famous nickname for the city is "Sampa". São Paulo is also known for its unreliable weather, the sheer size of its helicopter fleet, architecture and multitude of skyscrapers.[6] The São Paulo/Guarulhos International Airport connects São Paulo with many Brazilian cities and also operates international flights. (http://en.wikipedia.org/wiki/S%C3%A3o_Paulo)

6. Moscow – 10,452,000 inhabitants, is the capital and the largest city of Russia, and the largest city in Europe, with its metropolitan area ranking among the largest urban areas in the world. Moscow is the country's political, economic, religious, financial, educational and transportation centre. It is located on the Moskva River in the Central Federal District, in the European part of Russia. Historically, it was the capital of the former Soviet Union and the Grand Duchy of Moscow, the pre-Imperial Russian state.

It is the site of the Moscow Kremlin, which serves as the ceremonial residence of the President of Russia. Moscow is a major economic centre and is home to the largest number of billionaires in the world; in 2007 Moscow was named the world's most expensive city for the second year in a row. It is home to many scientific and educational institutions, as well as numerous sport facilities. It possesses a complex transport system that includes the world’s busiest metro system[citation needed], which is famous for its architecture and artwork. (http://en.wikipedia.org/wiki/Moscow)

7. Seoul – 10,356,202 inhabitants, is the capital and largest city of South Korea. With over ten million people, Seoul is one of the world's largest cities. It is also the world's second largest metropolitan area, the Seoul National Capital Area - which includes the major port city of Incheon and satellite towns in Gyeonggi-do, having almost 23 million inhabitants. Almost half of South Korea's population lives in the Seoul National Capital Area, and nearly one quarter in Seoul itself, making it the country's political, cultural, and economic centre. As a Special City, it is administered directly by the national government.

The city is located on the basin of the Han River in the country's northwest. The North Korean border lies about 50 km to the north. Seoul first appears in history in 18 BC, when the Baekje kingdom established its capital Wiryeseong in what is now around Songpa-gu, southeastern Seoul. Modern Seoul descends from the Goryeo-era city called Namgyeong, which then became the capital of Korea during the Joseon dynasty. As a major financial and cultural center, Seoul is considered a global city. The city has hosted the 1988 Summer Olympics and the 2002 FIFA World Cup. In 2007, it was listed as the third most expensive city in the world and the most expensive in Asia. In recent years, the Seoul Metropolitan Government has undertaken major environmental projects, including the nearly $1 billion restoration of Cheonggyecheon. At the same time, the city has promoted the Seoul Digital Media City, the world's first complex for high-tech digital technologies in multi-media, IT, and entertainment, and the proposed future site of the world's second tallest building.

8. Shanghai – 10,231,000 inhabitants, is the capital and largest city of South Korea. With over ten million people, Seoul is one of the world's largest cities. It is also the world's second largest metropolitan area, the Seoul National Capital Area - which includes the major port city of Incheon and satellite towns in Gyeonggi-do, having almost 23 million inhabitants. Almost half of South Korea's population lives in the Seoul National Capital Area, and nearly one quarter in Seoul itself, making it the country's political, cultural, and economic centre.

As a Special City, it is administered directly by the national government. The city is located on the basin of the Han River in the country's northwest. The North Korean border lies about 50 km to the north. Seoul first appears in history in 18 BC, when the Baekje kingdom established its capital Wiryeseong in what is now around Songpa-gu, southeastern Seoul. Modern Seoul descends from the Goryeo-era city called Namgyeong, which then became the capital of Korea during the Joseon dynasty. As a major financial and cultural center, Seoul is considered a global city. The city has hosted the 1988 Summer Olympics and the 2002 FIFA World Cup. In 2007, it was listed as the third most expensive city in the world and the most expensive in Asia. In recent years, the Seoul Metropolitan Government has undertaken major environmental projects, including the nearly $1 billion restoration of Cheonggyecheon. At the same time, the city has promoted the Seoul Digital Media City, the world's first complex for high-tech digital technologies in multi-media, IT, and entertainment, and the proposed future site of the world's second tallest building. (http://en.wikipedia.org/wiki/Shanghai)

9. Mexico City – 8,609,347 inhabitants, is the capital city of Mexico. It is the most important economic, industrial and cultural center in the country, and the most populous city with 8,720,916 inhabitants in 2005. Greater Mexico City (Zona Metropolitana del Valle de México) incorporates 58 adjacent municipalities of Mexico State and 1 municipality of the state of Hidalgo, according to the most recent definition agreed upon by the federal and state governments. In 2006 Greater Mexico City had a population of 19.2 million, making it the largest metropolitan area in the western hemisphere and the second largest in the world.

In 2005, it ranked the eighth in terms of GDP (PPP) among urban agglomerations in the world. Along with São Paulo it is the only Beta global city with 8 points in Latin America. Mexico City is also the Federal District (Distrito Federal in Spanish, and hence the abbreviation D.F.). The Federal District is coextensive with Mexico City: both are governed by a single institution and are constitutionally considered to be the same entity. This has not always been the case. The Federal District, created in 1824, was integrated by several municipalities, one of which was the municipality of Mexico City. As the city began to grow, it engulfed all other municipalities into one large urban area. In 1928, all municipalities within the Federal District were abolished, an action that left a vacuum in the legal status of Mexico City vis-à-vis the Federal District, even though for most practical purposes they were traditionally considered to be the same entity. In 1993, to end the sterile discussions about whether one concept had engulfed the other, or if any of the two entities had any existence in lieu of the other, the 44th Article of the Constitution of Mexico was reformed to clearly state that Mexico City is the Federal District, seat of the Powers of the Union and capital of the United Mexican States. (http://en.wikipedia.org/wiki/Mexico_City)

10. Jakarta – 8,576,788 inhabitants, is the capital and largest city of Indonesia. It was formerly known as Sunda Kelapa (397-1527), Jayakarta (1527-1619), Batavia (1619-1942), and Djakarta (1942-1972). Located on the northwest coast of the Java Island, it has an area of 661.52 km² and an official population of 8,389,443 (2000). Jakarta currently is the eleventh largest city in the world.

Its metropolitan area is called Jabodetabek and contains more than 23 million people, and is part of an even larger Jakarta-Bandung megalopolis.[citation needed] Jakarta is served by the Soekarno-Hatta International Airport. Since 2004, Jakarta, while under the governance of Sutiyoso, has built a new bus system known as "TransJakarta" or "Busway" and is planning to increase the number of Busway routes. The city had hoped to establish its newest transportation system, the Jakarta Monorail, in 2007, but the project has been delayed and its completion date is uncertain. Jakarta also is the location of the Indonesia Stock Exchange and the National Monument, Tugu Monas. (http://en.wikipedia.org/wiki/Jakarta)

(12th in rank is New York and London at 17th)

Many people, across the globe are moving from the countryside to the city by the thousands and millions. East Asia, for example, is currently embarking on the greatest period of urbanisation the world has seen since the industrial revolution. As these cities grow in population and more jobs are created in these urban landscapes, it poses the question, ‘how and where are they going to house everyone?’ If these cities are to remain as densely populated as they are today, the effect on property and land prices will be extraordinary. China alone has 20 million people a year moving from the country to the towns, and with similar figures in many other cities, and where supply has not been able to keep up with demand, it has forced up both rents and capital values.

Urban globalisation has an overwhelming effect on where there is a good investment to be had, in any market. However, this mass movement of the population and with ‘mega-cities’ forming around the globe, the property market is the most obvious beneficiary. It is therefore important to consider these densely populated cities, but with an all-round perspective. Where this can have a positive effect, in terms of investment, within countries where their economies are on the up as a result of the effects of urbanisation, it is important to remember that this is not a rule of thumb for every expanding city. Teething problems when coping with such rapid growth is worth considering, along with the stability of their political systems, location and supply and demand ratios. Nevertheless, the words ‘global urbanisation’ should remain to be an important factor to consider when investing in any industry.

Global urbanisation interactive map –
http://news.bbc.co.uk/1/shared/spl/hi/world/06/urbanisation/html/urbanisation.stm