Toronto is gaining status as a global player. A new report from JLL groups it with 10 “contenders” in a penultimate tier of successful world cities pushing up against the alpha “big seven” of London, New York, Paris, Singapore, Tokyo, Hong Kong and Seoul.
The rankings arise from an algorithmic analysis of 26 recognized leading indices that peg cities’ performance in areas such as knowledge industries and innovation, human and social capital, infrastructure and reputation, along with a broader overview of more than 300 indices that score and benchmark some aspect of urban life. Analysts also applied JLL’s own extensive research on investment transparency and commercial real estate markets in drawing their conclusions.
“Increasingly, these indices have a bearing in how we understand city dynamics, guiding investors, businesses and workers as they make location choices and shaping the viewpoints of visitors, students and entrepreneurs,” the report’s executive summary maintains. “They cover an evermore diverse range of attributes that signal where cities are heading. They point to which cities have the ingredients for future success and help steer the real estate industry in its response to the rapidly changing urban landscape.”
Data from all sources was used to assess cities’ ability to attract business, foster growth and provide for the needs of residents and visitors — categorized into 10 sometimes overlapping “imperatives for a successful city”. This underpins the designation of the 10 contenders, which also include Los Angeles, Shanghai, Beijing, Amsterdam, Chicago, San Francisco, Madrid, Sydney and Washington, DC.
Contenders are also benchmarked against seven core characteristics that the top echelon of cities possess. Including:
- Corporate presence with a critical mass of corporate headquarters and global enterprises such as finance, professional services and media;
- Gateway functions facilitating two-way movement of people, investment, trade, tourism and information;
- Scale and size of market and populations to support agglomeration, growth opportunities and capital investment;
- Infrastructure platform to connect and support firms, workers and visitors’
- Diverse and skilled talent pools;
- Specialization and innovation to produce and commercialize knowledge, products and services; and
- An attractive global brand and identity that projects the city’s core values.
In highlighting some of the city’s qualifications as a contender, the JLL report states: “Toronto combines diverse business sectors with a very strong institutional presence, and the city may stand to benefit from potential immigration reforms in the U.S., especially with regards to attracting tech talent.”
There are still challenges in quantifying data and making city-to-city comparisons for some of the attributes of urban success such “thinking long-term” or “creating a well-run city” — metrics for how cities plan for growth, balance their fiscal responsibilities and tax loads, manage infrastructure debts and invest in resilience — while the 10th category “going global” specifically applies to emergent regions beyond North American and Europe. However, Toronto scores well on most of the more conventional business-oriented matrices that rank performance.
This includes: third on the list of the world’s most transparent real estate markets; fourth for city brand and reputation; ninth for attracting and developing talent; and 14th for knowledge and innovation. The 19th for investing in infrastructure is the second highest placing for a North American city after New York in 9th and just ahead of San Francisco in 20th. As well, Toronto’s absence from the top-20 list for priciest office space could be another factor in luring global business.
In the three year period from July 1, 2014 to June 30, 2017, Toronto saw US $2 billion of commercial real estate investment to tie with Atlanta as the 19th most active global market. This falls short of all but Beijing, Madrid and Amsterdam in the list of top 17 cities, and mirrors Toronto’s 14th place status in the overall rankings.
Opportunities to advance may be found in major trends and influences that JLL identifies as city-shaping forces. Brexit and other geopolitical shifts have brought new uncertainties since the previous report on world cities was released two years ago, while housing affordability, socioeconomic inequality and air pollution are tagged as particular challenges for the big seven.
“The threats of conflict, displacement, protectionism, populist domestic policies, slowdowns in productivity and tensions between the big cities and their nation states all alter perceptions about which cities appear to be ‘safe bets’ or present higher risks for investment,” the report observes.