With bold, sustainable, and inclusive design and developments, real estate is uniquely positioned to make cities more liveable, as well as fit for the future, while pivoting the urban world to success.
For years, Asia Pacific has dominated the global ranking of top ten most livable cities, and this year the region secured its place in the elite list with Osaka (Japan) and Melbourne (Australia) jointly grabbing tenth position.
Cities today are changing faster than ever, grappling to adapt, and align with the new world dynamics. It is much more challenging for cities today to retain a competitive edge, attract people with a high quality of life, as well as lure businesses with compelling growth opportunities and access to a rich talent pool.
On the one hand, profound shifts such as - hybrid work, life-long learning goals, climate action commitments, focus on personal health and well-being - are fast moving the needle on living more meaningfully. Whilst on the other hand, surging inflation, high interest rates, and the macro-economic turbulences are setting these expectations awry.
Bedrock of successful cities
As the top global cities demonstrate, winners are those that enable affordable and quality accommodation, world class healthcare, exceptional connectivity, superior quality of air and safety. Osaka and Melbourne secured their places among the world’s most liveable cities with their top-tier education, finest retail, bustling cafes, and restaurants and the best of sports theatre, art, and tourism. What differentiates cities today are iconic features that make living more vibrant and culture-rich, with sustainable spaces propelling creativity, community, innovation, entrepreneurship, knowledge sharing and collaboration.
“Cities are crucial to uplifting human lives, and today they are playing an equally significant role in business strategies. While the fundamental requirements remain in terms of affordable housing, access to amenities and basic needs, what has really changed post-Covid-19 is the need to build cities fit for the purpose, and fit for the future.”
Sam Harvey-Jones
Chief Operating Officer | Asia Pacific
Burning imperatives: Asia Pacific
Urban Renewal
Urban decay is a burning challenge, and the major Asian cities are at various stages of their renewal journeys. The question is, can statutory bodies like the Urban Renewal Authority (URA) - set up by several Asian cities to regenerate rundown buildings, undertake and facilitate urban renewal at required speed? Consider this: Hong Kong has 600 buildings reaching 50 years of age every year.
“To tackle urban decay, private sector participation is key, with laser focus on measures to expedite approval and site development processes. Equally important is providing valuation and legal advice for individual owners at an early stage, along with sufficient funds for better quality replacement housing for them. A balance must be struck between individual property rights protection and the facilitation of redevelopment of dilapidated buildings.”
Dorothy Chow
Executive Director, Valuation and Advisory Services |Asia
Holistic city development strategies
Think global, act local: As nations’ growth engines, cities drive economies with employment opportunities, while nurturing lives. A comprehensive 50-year plan is crucial, along with meticulous planning of the multiple facets of a city, including transit, logistics, healthcare, hospitality, industries, leisure, keeping in view future economic growth and expansions.
Ensuring quality and affordable housing along with top-tier digital infrastructure and preparedness against health, environmental, and all types of potential risks: Here, the idea of smart cities comes into play with future generations set at the heart of all planning and development. It is essential to simultaneously create new areas or alternative precincts as growth magnets, to decongest cities. Moreover, cities today need particular care given the unprecedented environmental impact.
Factoring in the wider ecosystem to grow at speed as businesses flourish: Enabling opportunities for the private sector, startups, technology companies, academia, and nonprofit organisations is crucial.
Creating cities as social center-stage: The culture and social ecosystem of cities drive the national identity. The ways in which people exchange and initiate social and cultural change have a lot to do with how cities position themselves. More so, it has an enormous impact on the environment.
“We see many cities doubling in size in the 20-30 years. Managing this growth with the right infrastructure, job creation and other supply side dynamics is a big challenge. If not handled well, it may create a multitude of imbalances and social issues like proliferation of crime, aside from even bigger pressure on the environment in the years to come.”
Subhankar Mitra
Managing Director, Advisory Services |India
Designing Future Cities with 6 Cs
Real estate: Making cities more liveable and fit for the future
Residential
Diverse housing is an essential form of economic and social infrastructure in any city and especially within urban regeneration precincts. To offset long-term declines in funding of affordable housing across APAC’s fastest-growing cities, private sector-led investment in new residential development is essential to drive the creation of new stock.
The emergence of managed residential assets, exemplified by Built To Rent and Co-Living typologies, is one response to structural market imbalances. These residential assets align long-term investment horizons of institutions seeking stable returns with underlying economic needs of cities for accommodation that is secure, functional and aspirational across all price segments.
“New investment in residential development is most attracted to cities offering strong real estate market fundamentals coupled with appropriate tax and other policies. Competitiveness of city economies is underpinned where new housing supply is able to accommodate both changing needs of existing residents as well as different requirements from recent migrants.”
Robert Papaleo
National Director, Built to Rent |Australia
Office
Future offices will play a mammoth role in determining a city’s livability, and its economic growth trajectory. With investors ready to pay a premium for green buildings, the office sector is seen leading the ESG drive in many cities, with innovative design and technology around renovation and construction of office buildings.
On the other hand, as businesses run their post-covid office strategies on full throttle, the focus is on creating a vibrant workplace experience with high tech connectivity, top-notch design, and a wide range of amenities catering to health, wellness, social and personal considerations. This is adding new vibrancy and vitality to the office precincts and business districts, fostering a new and innovative wave of retail, leisure, cafes, and restaurants across cities.
“Cities are competing fiercely in the global marketplace for investments to fuel job creation and economic growth. Quality offices are key to making cities more desirable. It’s a top consideration for any company looking to enter new markets or grow their presence in existing geographies. Despite the non-stop discussion on work from home, offices are here to stay, albeit with an enhanced focus on attracting talent to come into the office as companies shift more towards hybrid working.”
Robert Wilkinson
Managing Director | Korea
Retail & Hotels
The most desirable cities of the world have the best retail, leisure and hospitality. From luxury hotels and premium stores to the humble shops selling local handcrafted products, to cafes, restaurants, and bars – hospitality and retail fill cities with character, color, and vitality, making them liveable, lovable and aspirational. Moreover, the sectors turbo-charge the economy of cities with thousands of jobs and allied services.
“Future cities will have to be designed with retail and hospitality as central themes, across city centers, business districts, suburbs, or any other precinct. Burgeoning retail trends are reshaping living and redefining aspirational values. Luxury brands, for instance, have had the biggest influence on the urban world in past years. It is no longer only affordable to the very wealthy, it’s designed and much sought after today by the middle consumer who sees it as a reward, aside from status.”
Michael Bate
Head of Retail |Australia
Industrial & Logistics
“In several cities across the region, many old industrial districts are experiencing a revival and, in the process, bringing opportunities for cities and surrounding communities. Investments in building and infrastructure for data centers, cold chain facilities are also helping improve neighbourhood image, giving a sense of vitality to obsolete places while bringing an increased tax base to cities.”
Michael Bowens
Head of Industrial | Asia
The most liveable, sustainable and business friendly cities will continue to top investors’ wish lists. Revitalising cities, with real estate set at their core, has never been more crucial.
Colliers works extensively with public and private sector clients across Asia Pacific markets, and we welcome the opportunity to discuss how we can help you accelerate your success.
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