Cities at the Intersection

The New Commercial Geography

Rosemary Feenan

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>$50 bill – SUPER CITIES

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PARIS

NEW YORK TOKYO

LONDON

Seoul

Hong Kong

Singapore

San Francisco

Los Angeles Washington DC

Sydney

Shanghai

Beijing

Moscow Stockholm

Berlin Frankfurt Munich

Toronto Boston

Dallas

Houston Phoenix

Chicago

San Jose

Direct Commercial Real Estate Investment, Q2 2011 – Q2 2014, September 2014

San Diego

Seattle

Atlanta Miami

Denver

Static Patterns in Changing World?

50% of investment in 30 cities

The Shifting Hierarchy of Growth – Lifting Cities

The Power of Technology – Spreading ‘Smart’

The Imperative of Resilience

7

Medellin

Bogota

Resurgent Cities

City Evolution Curves

Position at 2014

Co

mm

erci

al R

eal E

stat

e A

ctiv

ity

Evolution

High

Low

New

York

Paris

London

Tokyo

Nascent Early Growth Development Transitional Mature Super City

Lagos

Istanbul

Bogota

Sao

Paulo Moscow

Shanghai

Position at 2025

Frankfurt

Dubai Madrid

Seoul

Warsaw

Source: JLL

City Evolution Curves

The 25 year journey

Co

mm

erci

al R

eal E

stat

e A

ctiv

ity

Evolution

High

Low

Nascent Early Growth Development Transitional Mature Super City

Istanbul

Lagos

Dubai

Moscow

Shanghai

Bogota

Sao

Paolo

Warsaw

Sao

Paulo

Madrid Frankfurt

New

York

Paris

Tokyo Shanghai

Istanbul

Lagos

Bogota

Moscow

Warsaw

Sao Paulo

Madrid

Frankfurt

Dubai

New

York London

Tokyo Paris London

Source: JLL

A Change in Tone of the List….

Direct Commercial Property Investment, 3-year total volumes, Q2 2011 - Q2 2014

1 London 97

2 New York 90

3 Tokyo 54

4 Paris 52

5 Los Angeles 37

6 Chicago 30

7 Washington DC 29

8 Hong Kong 27

9 Singapore 27

10 Seoul 26

11 Shanghai 25

12 San Francisco 23

13 Boston 22

14 Sydney 22

15 Dallas 18

16 Seattle 17

17 Toronto 16

18 Houston 16

19 Stockholm 15

20 Moscow 15

21 Munich 15

22 San Jose 14

23 Beijing 14

24 Atlanta 13

25 San Diego 12

26 Frankfurt 12

27 Denver 11

28 Miami 11

29 Phoenix 10

30 Berlin 10

US$bn US$bn US$bn

Rank City

Total Investment

(US$m)

1 London 130,464

2 Tokyo 86,990

3 New York 66,107

4 Paris 49,342

5 San Francisco 19,625

6 Chicago 19,468

7 Stockholm 19,249

8 Hong Kong 17,037

9 Los Angeles 16,888

10 Sydney 15,953

11 Boston 15,036

12 Toronto 14,502

13 Madrid 13,717

14 Frankfurt 11,994

15 Washington, DC 11,723

16 Hamburg 11,224

17 Osaka 10,107

18 Seoul 10,084

19 Berlin 9,690

20 Seattle 9,643

21 Singapore 9,604

22 Milan 8,494

23 Munich 8,370

24 Beijing 8,295

25 Melbourne 8,122

26 Dublin 8,046

27 Atlanta 8,028

28 Brussels 7,500

29 San Diego 7,253

30 Brisbane 7,130

Europe Americas Asia Pacific

Source: JLL

The Rise of Tech-Rich Cities Top 12 Office Rent Performers Q3 2014* (year-on-year)

Based on rents for Grade A space. *Cities over 1 million population in Advanced and Transitional Economies

Source: JLL, October 2014

0 5 10 15 20 25 30

Los Angeles

Portland

Tokyo

Austin

Auckland

Boston

Taipei

Houston

Lyon

Singapore

San Francisco

Dublin

The GAFA Economy, Creating New Platforms for Change

A New Silicon Geography

A Permanent Realignment? Investment Intensity Index

Oslo 1

Tokyo 30

Munich 2

London 3

Stockholm 4

Copenhagen 5

Sydney 6

Warsaw 7

Frankfurt 8

Gothenburg 9

Paris 10

Taipei 11

Edinburgh 12

Singapore 13

San Francisco 14

Hong Kong 15

Zurich 16

New York 21

Total Real Estate Investment

as proportion of City GDP

* three-year rolling total direct real estate investment volumes to Q2 2014

Source: JLL, September 2014

2000 2010 2020 2030

Urbanisation's Frenetic Pathway : Next Intersection Cities? GDP 2000 – 2030 : Rapid Climbers

Office Supply Pipeline - Major Markets, 2015 - 2016

0 5 10 15 20 25 30 35 40 45

New YorkChicago

Washington DCSeoul

TorontoSan Francisco

BostonSydneyLondon

ParisHong KongSingapore

TokyoMoscow

BeijingDubai

MumbaiMexico City

Sao PauloShanghai

Completions as % of existing stock

Source: JLL, October 2014. Covers all office sub-markets in each city. Tokyo – CBD - 5 wards

2015 2016

China, India and LATAM see highest development

Tripoli

Khartoum

Harare

Abidjan Lagos, Abuja

Kinshasa

Cairo Nairobi, Kampala Addis Ababa

Luanda

Tunis, Algiers Dakar

Casablanca Accra, Lusaka Dar es Salaam

Maputo

Jo’burg, Cape Town Port Louis

Gaborone

African Cities – Risk v Opportunity Challenge

Ris

k

Growth

Lowest

Highest

Lowest Highest

Risk: Country Risk, Oxford Economics, August 2014; GDP Change 2012-14, Oxford Economics, August 2014

Source: JLL, August 2014

JLL Global 300

% of global total

Jll Global 300 are derived from a weighted basket of population, GDP, corporate presence, air connectivity, commercial real estate stock and real estate investment volumes

Source: JLL, 2014 November

17 %

Population

38%

GDP

80%

Office stock

72%

Investment

$

JLL Global 300 account for 72% of real estate investment

and over 80% of commercial office stock globally

45%

Office employment

JLL Global 300 – Economic Size

What about some simple

buildings instead of bars with

the axis lines and numbers

removed?

JLL Global 300 & Alpha Cities – Economic Size JLL Global 300 – Commercial Attraction JLL Global 300 – Real Estate Investment

Real Estate Investment, Q2 2011-Q2 2014

Cross-Border Real Estate Investment Activity

London:

US$97bn

59%

41%

New York

US$90bn

32%

68%

Paris:

US$57bn

61%

39%

Domestic Cross-Border

Tokyo:

US$54bn

89%

11%

Hong Kong:

US$30 bn

20%

80%

Shanghai:

US$27bn

68%

32%

Sao Paulo:

US$3bn

48%

52%

San Diego:

US$12bn

80%

20%

Growing Share of Cross-Border Investment?

Market Transparency

5 Sub-Indices

Sources: JLL, LaSalle Investment Management

13 Transparency Topics

Performance

Measurement

Market

Fundamentals

Transaction

Process

Governance

of Listed

Vehicles

Regulatory

and Legal

115 individual questions and data-points for each market

Composite

Score

Global Real Estate Transparency Index, 2014

Key Drivers of Transparency Improvement, 2014

Sustainability tools

Renewed economic growth

Expanding global reach

Rising expectations

‘Open Data’ culture

Source: JLL, LaSalle Investment Management

Recognition of impacts

Media spotlight

Opaque Low

Semi

Transparent

Highly transparent

Caracas

Karachi

Algiers

Luanda

Lagos

Khartoum

Ho Chi Minh City

Panama City

Casablanca

Cairo

Lima

Bogota

Istanbul

Shanghai

Moscow

Jakarta

Bangkok

Seoul

Dubai

Mumbai

Buenos Aires

Kiev

Riyadh

Hong Kong

Singapore

Frankfurt

Madrid

Brussels

Warsaw

Johannesburg

Tokyo

Sao Paulo

New York

London

Sydney

Toronto

Calgary

Vancouver

Montreal

Amsterdam

Paris

Stockholm

Zurich

Helsinki

Global Real Estate Transparency Index, 2014

Top Transparency Improvers, 2012 – 2014

Sub-Saharan Africa and Latin

America take centre-stage

Sources: JLL, LaSalle Investment Management

0.0 0.1 0.2 0.3 0.4 0.5

Budapest

Lima

Almaty

Belgrade

Dublin

Bogota

Port Louis

Algiers

Lusaka

Bucharest

Lagos

Accra

Doha

Nairobi

Global Real Estate Transparency Index

Predictions for 2016

Technology

Social media, Crowdsourcing innovative data models

Sustainability Rises Up Agenda

Performance Measurement Tools

Rising Expectations of Millennial Generation

Sub-Saharan Africa shows strongest improvement

Return of the BRICs among the

Top Improvers

The Business of City Competitiveness

1 New York

2 London

3 Hong Kong

4 Singapore

5 San Francisco

6 Tokyo

7 Zurich

8 Seoul

9 Boston

10 Washington DC

11 Toronto

12 Chicago

13 Geneva

14 Vancouver

15 Luxembourg

16 Frankfurt

17 Dubai

18 Montreal

19 Abu Dhabi

20 Shanghai

Z/Yen

Global Financial

Centres

2Think Now

Innovation Index

Creativity and

Innovation

1 San Francisco

2 New York

3 London

4 Boston

5 Paris

6 Vienna

7 Munich

8 Amsterdam

9 Copenhagen

10 Seattle

11 Toronto

12 Seoul

13 Berlin

14 Los Angeles

15 Tokyo

16 Stockholm

17 Sydney

18 Hamburg

19 Lyon

20 Hong Kong

City Competiveness Indices

Financial

Services

Strength

Source: Mori Memorial Foundation, AT Kearney, Z/Yen

1 London

2 New York

3 Paris

4 Tokyo

5 Singapore

6 Seoul

7 Amsterdam

8 Berlin

9 Hong Kong

10 Vienna

11 Frankfurt

12 Zurich

13 Sydney

14 Beijing

15 Shanghai

16 Stockholm

17 Toronto

18 Copenhagen

19 Madrid

20 Los Angeles

1 New York

2 London

3 Paris

4 Tokyo

5 Hong Kong

6 Lost Angeles

7 Chicago

8 Beijing

9 Singapore

10 Washington DC

11 Brussels

12 Seoul

13 Toronto

14 Sydney

15 Madrid

16 Vienna

17 Moscow

18 Shanghai

19 Berlin

20 Buenos Aires

AT Kearney

Global Cities

Magnetism Global

Attraction

Mori Memorial

Foundation Global

Power City

City Competiveness Indices

The Toronto Competitiveness Cobweb

Cities will Follow Different Pathways to Success

‘Global Fluency’ in Modern Urbanism Ten Attributes of Emerging World Cities

Brookings/Greg Clark

Leadership with a worldview

Legacy of global orientation

Specialization & global reach

Adaptability to new dynamics

Knowledge and innovation

Global appeal

International connectivity

Secure inward investment

Government as global enabler

Compelling global brand

10

JLL City Momentum Index : City Clusters

Incubator Cities

Paris, Berlin, Chicago

Amsterdam

Copenhagen, Sydney

Lo

ng

- te

rm M

om

entu

m

Short-term Momentum

Source: JLL, 2014

San Francisco, San

Jose Austin, Boston,

Seoul Toronto, Munich

High-Tech Hubs Global Gateways

London, New York

Hong Kong, Singapore

Los Angeles

BRIC Urbanisers

Shanghai, Beijing

Wuhan, Chengdu, Tianjin

Shenzhen, Guangzhou

Mumbai, Delhi

Tokyo

Dubai, Dublin

Resurgent Cities

Lima, Jakarta, Bogota

Manila, Bangkok

Beyond the BRICs

Real Estate Investment - A Driver of Success

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