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Property Talk

Property Talk

Author: Andreas Wassenaar
Date: 2016-09-23
If you want to feel inspired and feel a sense of adventure of how the great cities in the world are developing, get a copy of Knight Frank's Global Cities 2017 Report which looks at the future of real estate in the world's leading cities. It is fascinating. It does however place South Africa into perspective on a global scene - if we fell off the planet, believe me very few people would miss a beat. This is not necessarily a bad thing as it provides us with an opportunity to learn from what is happening in the leading cities of the world and attempt to adapt and implement aspects of that success on home ground. The common message coming from the 34 leading Global Cities surveyed in the report is that their economies are increasingly people-centric. Regardless whether a city is driven by finance, aerospace, commodities, defence or manufacturing, the most important asset is a large pool of educated and creative workers. The real estate developments that are noted in these centres, are increasingly businesses that look to build an environment that attract and retain such people. For those who have experienced New York City recently and the incredible developments currently underway on Manhattan, a flavor of this aspect is presented through the mega residential/office/retail developments that are recreating living spaces where people live, work and play within a relatively confined area. One of the telling stats published in this report was the commercial real estate investment volume to the year to June 2016 by city. The top 15 investment destinations for current office, retail, industrial and hotel real estate investment are completely dominated by US cities - to the tune of 7 of the top 15 cities. The top city by far is Manhattan with US$40,7bn, followed by London (US$35,9bn); Los Angeles (US$33,1bn) and San Francisco (US$25,8bn). Four Asian cities are counted within this top group of investment destinations - namely Tokyo (US$20,8bn), Hong Kong (US$12,2bn), Shanghai (US$11,2bn) and Singapore (US$6,5bn). Only two European cities are featured - London as mentioned above in second position and Paris in 5th at US$23,7bn. Both Sydney (US$8,8bn) and Melbourne (US$6,4bn) also feature giving some sense of how far these two Australian cities have streaked ahead of our South African cities over the past decade. The investment in global cities is a response to an urbanization trend. The UN says that currently 54% of the world's population live in cities compared to just 30% in 1950. This figure is predicted to grow to 66% by 2050. What is almost certain is that the cities of the future will look and work differently to what we have today. Cities will combine residential, office, retail and leisure spaces in ways we have not even imagined as yet. The opportunities will be there for the taking.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.

Andreas Wassenaar

Principal - Seeff Dolphin Coast

Cell: 082 837 9094

andreasw@seeff.com