Dubai and Johannesburg ranked as top destinations for Fortune 500 settlement in the MEA region
Infomineo released a new report that focuses on multinationals looking at entering or are already present in the Middle East and Africa region. Overall, there was a 17 per cent increase in the number of companies in MEA in 2016 compared to 2015, with Dubai being the leading destination for regional HQs by far.
The research looked at the top global companies, taken from the Fortune 500 ranking. They examined the general data available such as type of industry, revenues and global workforce. They then looked at the locations of their regional HQs in MEA, if any. Finally, they looked at the location of the sub-regional headquarters in Africa and the Middle East. The objective of this research was to assess the regional footprint of top multinationals in the MEA region. This was done to determine the most commonly chosen cities as a base for regional activities and finally, to look for any indications about the path that these multinationals were following before and when entering the Middle East and Africa.
Overall, global Fortune 500 companies have recently begun to establish a footprint in the MEA region with 196 companies having a dedicated entity covering the region, compared to 167 in 2015. However, as of today, the large majority of companies (305) do not have dedicated entity covering the region. Johannesburg remains the prime destination in Africa with a total of 58 companies located there, compared to 46 in 2015; while Dubai is by far the leading destination for regional HQs with a total of 138 companies, compared to 127 in 2015. Interestingly enough, 38 companies have chosen to cover the MEA from outside of the region, substantially more than in 2015 (22).
Germany and France are leading in terms of coverage rate while China has the lowest presence in the region. The finance industry is still a leader in company count with 29 per cent of finance companies having a presence in the MEA compared to 33 per cent in 2015. The energy industry has shown the highest growth rate in MEA with an increase of 61 per cent. Notably, the automotive industry, healthcare industry and food and beverage industry have also ranked high.
Dubai and Johannesburg are the most desirable hubs in the region, followed by Casablanca and Nairobi. Casablanca and London gained the highest market share. Noticeably, London tripled its number of regional HQs in the region, acting as an MEA hub. Given the geographical proximity and the talent pool present in the city, it could be that London is playing the role of a first step into the MEA region, especially for Japanese and North American companies.