- Sydney ranked 15th most resilient city in world, the only Australian city to make the top 20
- City increasing in resilience ranking on a global scale, after placing 18th in 2016
- Strong commercial and industrial market, emerging tech sector, demographic and economic strength, and strengthened ESG credentials all named key contributors
Leading real estate services provider Savills has named Sydney the 15th most resilient city in the world in its 2022 Resilient Cities Index.
Sydney was the sole Australian city to make the top 20 list, moving up the ranks since taking 18th place in 2016.
New York, London, Los Angeles, San Francisco and Tokyo took Savills’ top five places for their strong comebacks from the economic and social impacts of Covid-19.
Commercial and industrial sales driving resilience
According to Savills, several factors have contributed to Sydney’s increased resilience rank since 2016.
The 2022 index named key factors in Sydney’s increasing resilience, which included a robust commercial property market supported by the commercial office and industrial sectors, an emerging tech sector, continued demographic and economic strength, and strengthened ESG credentials.
Despite the city’s commercial real estate investment volumes declining between 2016 and 2021, Sydney’s cross-border share of investment remained at 40% in 2021. These levels remained in line with the five-year average and only dipped marginally below 2019 levels.
Paul Craig, CEO of Savills Australia and New Zealand, said there has been an anecdotal perception that Sydney’s economy has come out the other side of Covid-19 stronger than ever.
“Now we have the data to not only back that up, but to compare Sydney to other global cities and measure its resilience.”
Paul Craig, Savills CEO Au & NZ
“Sydney’s relatively diversified base of real estate capital, coupled with strong property
rights, has helped it maintain its resilience despite the Covid-19 pandemic.
“Sydney’s commercial office and industrial sectors have been particularly buoyant with both growing by more than 40% between 2020 and 2021 despite the various lockdowns, restrictions and on-going impact of Covid-19,” added Mr Craig.
Sydney’s industrial sector also remained robust throughout the pandemic with a rise in online spending driving increased demand for warehousing and logistics. High demand has been reflected in a spate of multi-million dollar sales during 2020 and 2021.
Renewable energy investment powering ahead
Also going from strength to strength is Sydney’s tech sector, which has experienced a significant rise in venture capital investment between 2016 and 2022.
Data from capital market company PitchBook indicates venture capital investment in Sydney totaled US$277 million in 2016, before increasing dramatically to US$1.9 million in 2021.
Additionally, the number of fintech venture capital deals has more than doubled during this time, while capital raised has increased five-fold.
Director in Savills World Research Paul Tostevin said Sydney’s economic fundamentals remain strong, with the working-age population remaining steady while the overall population has risen.
“Our research has shown that GDP per capita has grown by 5% since 2016.”
Paul Tostevin, Director in Savills World Research
Sydney’s environmental credentials have also supported the city’s rise in resilience ranking, after New South Wales has invested more than AU$9 billion in large-scale renewable energy projects since 2016.
The state has also increased its renewable energy electricity generation from 17.3% to 32.5% between 2016 and 2022, by investing in energy sources such as wind and solar.
2020 marked a major milestone in the city’s transition to renewable energy, with all city-owned properties in Sydney operating via 100% renewable energy.
According to Savills, Sydney’s pursuit of ambitious net zero targets has also boosted the city’s resilience levels on a global scale, with more than $4.8 million pledged by the NSW Government to accelerate the built environment towards net zero targets.