African cities have got work to do if they are to measure up to their peers in other continents with regard to attracting big money investments in luxury property. The convenience and appeal of a city to wealthy investors depends on many variables which include returns, security, social and physical infrastructure. And as one would expect, the wealthy favour identical company much like peas of a pod. Certainly, this list is not exhaustive but they highlight some of the most pertinent issues that African cities grapple with.
This was evident in a report by Warburg and Barnes which globally ranked the top 50 most desirable cities to high net worth individuals for buying luxury property into an index named the Alpha cities index, giving them a score of 0-100. The most promising African city, Cape Town of South Africa, was ranked 37th with a score of 42 out of 100, quite below the average. As a matter of course, North America, Europe, Middle East and Asia were well represented. The cities were evaluated based on three categories; practical, emotional and financial factors.
London emerged top of the list with an overall score of 77 largely due to its strength in areas such as cultural richness, education, luxury shopping, ease of doing business, connectivity, financial safety and the clout of ultra-wealthy individuals who call the city home. Natural environment and security were no less important. In second place was New York, which also boasts the highest population of ultra-wealthy individuals in the world. The other contenders for the top five included Tokyo, Sidney and Paris.
The characteristics held in common by the top 5 cities in the index comprise; high quality educational institutions, strong cultural base, excellent luxury shopping facilities, ease of doing business, financial safe havens, connectivity and a large pool of ultra-wealthy individuals. The U.S contributed nearly half of the top 25 cities in the list, which mirrors the high number of ultra-wealthy individuals in the country. China provided 11 cities to the list, the second highest, followed by Germany and Switzerland which had 3 cities each.
Highly ranked educational institutions are credited for fostering U.S cities ability to dominate the alpha cities index, with the country hosting 41 out of the top 100 universities in the world. This, in addition to a range of other factors raises the likelihood of individuals being attracted to those cities.
Emotional factors were also key in the performance of cities. Emotionally luxurious allurements such as art, music, museums, rich cultural heritage and status, restaurants and luxury shopping malls also enhance the convenience of a city to wealthy people. Additionally, affluent persons prefer to reside together with other wealthy individuals.
Financially, the top cities are known to provide a good business environment, a competitive property tax regime, attractive property prices and a financial safe haven status.
In general, building alpha cities requires a complex recipe of positive factors that take time and concerted effort. Government policies, strategic planning and co-operation from both government and private sector are essential. Education, entrepreneurship, and culture too play a big role and these may be the starting points for African cities to flourish.