JLL NWCs Auckland Greg Clark Jan 2016
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8/20/2019 JLL NWCs Auckland Greg Clark Jan 2016
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The BUSINESS of CITIES 1
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The BUSINESS of CITIES
Congratulations…….Auckland
City Centre
Housing and Development
Winyard Quarter
City Rail Link
TPP Opportunity
Next cycle is all about the effects of success
2
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The BUSINESS of CITIES
Cycle Dynamics and Cities
1st Cycle
Projects & Physical
Renewal
Promote the Metro
Tourism
EventsFDI
2nd Cycle
Assets
Specialist Agencies
Metro brand
Larger EventsNew funding tools.
Entrepreneurship
Economicdevelopment.
Strategic Visions
Internal governance
reforms
3rd Cycle
Managing growth anddiversification
Business Friendly Metro
Investment Ready Metro
Innovation / Universities
Shaping the future
Metropolitan sphere
Broader leadership
Integrated Brand Alliances
Summits
InternationalisationStrategy
4th Cycle
Managing success at the
international scaleCompetitive benchmarking
Eco-system management
Business Leadership
Dealing with growth andexternalities
External governancereforms.
Global Summits
Signature events
3
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The BUSINESS of CITIES
A new urban age
4
• No longer abouthierarchy,
command and
control
• More cities thanever competing
• Size no longerequals success
• Not one model ofsuccess – moreways to win
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The BUSINESS of CITIES
Globalization of cities happens in waves
5
Cities (re)entering a global path
Antwerp,Genoa,Istanbul,Venice
Amsterdam,Guangzhou, London,
New York
Berlin, Paris,Birmingham
Bilbao, LiverpoolManchester,
Rotterdam, Vienna
Munich, Seoul,Singapore,
Tokyo, Toronto
Bangalore,Barcelona, Chicago,
Sydney,Tel Aviv
Colombo,Nanjing,Brisbane,
Auckland,Sao Paulo….
1492 -1650
1650 -1780
1780 -1850
1850 -1914
1945 -1973
1985 -
2007
2010 -
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The BUSINESS of CITIES
Global Fluency?
6
Leadership with a Worldview Legacy of Global Orientation
Specializations with
Global Reach
Adaptability to GlobalDynamics
Culture of Knowledgeand Innovation
Opportunity and Appeal to the World
Compelling Global Identity
Government as GlobalEnabler
Ability to Secure Investmentfor Strategic Priorities
International Connectivity
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New Globalising Cities
• New World of Cities isabout more than justbig global cities
• Not only corporatehubs and financial
centres• Changing global
geographies
• New Roles
• Hybrids andtransformers
• Different types of citieswith distinctivesuccess models
7
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The Established World Cities: the ‘Big Six’
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Uniquely globalised
Corporate clusters with globalreach
Biggest shares of financial andbiz services
Strong infrastructure platform
Cultural appeal
Political and legal frameworks
Magnets for global FDI
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The Established World Cities: leading hubs for
knowledge and talent
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Established World Cities: Destination Power
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• Biggest publictransport, logistics,
uti li ty, IT and airport
systems
• Challenge to invest,maintain and upgradeinfrastructure
• Externalities withinMetros
11
Established World Cities:
unintended consequences of success
• Not the mostliveable
• Congestion• Housing affordability
crises
• Higher risks
• Not the mostsustainable: butperform well for
size
• Improving policiesfor resilience
• Tacklingexternalities at
national level.
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Emerging World Cities – a new economic
geography
• New cities integrating intoglobal economy
• New centres of demandand supply, new corporategateways to large domesticeconomies
• New HQ locations
• Some also becoming
financial centres
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Emerging World Cities – new roles
• Closing thegap asfinancialcentres
• Tokyo andParis beingovertaken byShanghai,Singapore,
and Taipei
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Emerging World Cities: diverse roles
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A typology of emerging world cities
15
• Shanghai and Beijing nearly emerged
• 2nd tier – competitive megaci ties -many rapidly improving gateways,challenges remain
• 3rd and 4th tier – high potential butconstrained cities
• 4th tier – struggling megacities orcities starting 1st globalisation cycle
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Emerging World Cities: key priorities
• Physical capital =urgent deficit
• To move up valuechains, by attractingtalent not justinvestment
• From production toinnovation
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The BUSINESS of CITIES
The new silk road?
17
l
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The BUSINESS of CITIES 18
TokyoSeoul
Busan
Beijing
Shanghai
Taipei
Manila
Jakarta
Singapore
KL
Bangkok
Mumbai
New Delhi
Bangalore
HK
Wuhan
Hangzhou
Nanjing
Guangzhou Shenzhen
Big Six
Asian cities in two cycles time?
Institutions, diplomacy, domestic fir
Tech and innovation hubs
Tourism and entertainment
Adv. manufacturing + trade
High quality of life
Osaka
Colombo
Xi’an
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The BUSINESS of CITIES
New World Cities
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Smaller, specialised and agile
Rapidly globalising
Good infrastructure, high quality oflife, fewer negative externalities
Knowledge centres
Culture/entertainment
High-tech / innovation / R&D
Convention / tourism hubs
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The BUSINESS of CITIES
New World Cities - Drivers
• Global economic centre of gravity shifting East and South
• Mobility and reach of new global middle classes
• Urbanisation reshaping economic and spatial balances
• New business sectors are internationalising
• Technology driving new systems of production and integration
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The BUSINESS of CITIES
New World Cities: attraction to global investment
21
Punch above their
weight
Tech and start-up culture
Liveability
Attraction to investorsseeking value beyond
established andemerging cities
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The BUSINESS of CITIES
New World Cities: comparative advantages
• Business and Investorfriendliness: e.g.Miami, Santiago
• Innovation and techsector leadership: e.g.Melbourne, Toronto,Boston.
• Climate, urbanenvironment andlifestyle: e.g.
Auckland, Barcelona
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H d h d?
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The BUSINESS of CITIES
How do they succeed?Combining global leadership with local quality
• Size: smaller, more agile, and affordable
• Expert specialisation within a more managed metropolis
• Better live-work balance
• Efficient infrastructure
• Problem-solving capabilities
• Low congestion, inflation, and pollution
• Safety, security, education
• Clear leadership identity
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The BUSINESS of CITIES
New World Cities: sustaining advantages for 2+ cycles
• Danger of becoming ‘one trick pony’
• Need to address externalities of success, maintain
quality: e.g. Auckland ‘SuperCity’, Greater SydneyCommission, Barcelona Global Talent Programme, OsloRegion
• Challenges include: rising costs / prices, access toentrepreneurs, digital infrastructure, congestion, over-reliance on tourism
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The BUSINESS of CITIES
Auckland’s key traits and spidergram
26
Global FirmsBusiness fr iendliness
Financial services
Investment
attraction
Talent and
labour market
Higher education
R&D and
innovationLiveability
Wages
and
costs
Sustainability
Transport and
infrastructure
Culture and
diversity
Visitor and
Destination power
Image, brand
and influence
Liveability and
sustainability isits USP
Attraction toinvestors, visitors,talent & tech
Infrastructureimproving
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The BUSINESS of CITIES
Auckland’s strong cycle of growth viz NWC
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Post-crisis economic performance
Source: Brookings and GaWC
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The BUSINESS of CITIES
Auckland: smaller but plugged in
28
• Small economy byworld city standards
BUT
One of the mostdynamic
Highly globalised forits size
GDP ($US bns)
GDP per
Capita ($US‘000)
Global
Connectivity Rank(GaWC)
IBM Most
Competitive Cities‘International HQs’
No of Cities 300 300 300+ 100
Sydney 223 46 9 17
Toronto 276 45 17 8
Vienna 184 49 27 18
San Francisco 331 72 28 14
Melbourne 178 40 34 26
Miami 263 44 36 24
Barcelona 171 36 37 25
Boston 360 76 39
Munich 220 56 42
Stockholm 143 56 43 11
Copenhagen 127 42 48 15
Tel Aviv 153 43 60 49
Berlin 158 36 63 10 Auckland 50 32 72 35
Vancouver 110 44 76 23
Oslo 74 53 79
Brisbane 97 42 80
Helsinki 77 48 81 29
Seattle 267 73 99
Denver 170 62 106
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The BUSINESS of CITIES
An investment magnet
29
EmergingTrends in
Real Estate
JLL Global 300JLL City
MomentumIndex
JLL
InvestmentIntensity
IndexCommercial Attraction
Index
CrossBorder Real
EstateInvestment
No of Cities
EU 28, US 75,
Canada 9, AP 22300 120 25
Sydney 2 23 11 8 4
Berlin 1 48 21 - -
Toronto 2 25 29 - -
San Francisco8 17 6 10 11
Munich 10 33 13 - 2
Miami 19 34 35 - -
Melbourne 3 43 24 18 12
Copenhagen 5 67 45 - 6
Boston 13 23 10 5 17
Oslo - 70 54 - 5
Vancouver 1 83 73 - -
Seattle 4 40 16 13 20Stockholm 11 45 12 - 10
Barcelona 12 56 41 - -
Auckland 10 102 58 20 7
Denver 6 39 25 - 25
Helsinki 16 91 61 - -
Vienna 23 64 40 - -
Brisbane - 78 50 - 22
Tel Aviv - 90 193 - -
• Punches well above weight
• 7th in JLL InvestmentIntensi ty Index (investmentrelative to size)
• Top 10 Investment Promotion
Strategy (fDi)
• About to join top 20 citiesglobally in 2016 index
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The BUSINESS of CITIES
A liveability capital
Mercer
Quality ofLivingSurvey
EIU
LiveabilityIndex
Global
LiveableCities Index
Monocle
Quality ofLivingSurvey
No. of Cities 230 140 63 25+
Vienna 1 2 - 2
Toronto 15 4 - -
Melbourne 16 1 13 4
Helsinki 31 10 4 8
Sydney10 7 14 5
Auckland 3 9 8 17
Vancouver 5 13 12 7
Stockholm 19 24 5 6
Berlin 14 20 11 3
Munich 4 28 - 9
Copenhagen 9 22 9 10
Brisbane 37 18 - -
San Francisco 27 49 - -Seattle 44 46 - -
Oslo 31 23 - 23
Miami 65 37 - -
Boston 34 33 23 -
Barcelona 38 31 29 24
Tel Aviv 105 76 - -
30
Top 10% of most liveable cities
Attracts people and talent
Platform for cultural, tourism andinnovation economy
Cornerstone of The Auckland Plan
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The BUSINESS of CITIES
Key dimensions of Auckland’s liveability
31
Stability
GLCI
Culture and environment
Public services
Governance
GLCI
GLCIEIU
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The BUSINESS of CITIES
Specialisation in
newly traded markets
32
IESE Cities in Motion IndexRank
Melbourne 2
Sydney 4
Berlin 9
Munich 11
Vancouver 13
Toronto 13
Boston 13
Vienna 16
Auckland 18
Brisbane 18
Stockholm 24Copenhagen 27
San Francisco 27
Barcelona 30
Helsinki 34
Oslo 60
QS Best Student Cities‘Technology’
‘Mobility andTransportation’
No. of Cities 148
Munich 26 3
Boston 10 26
Copenhagen 32 4
Helsinki 29 9Vienna 40 2
Berlin 33 17
Stockholm 36 15
Melbourne 18 35
San Francisco 5 61
Auckland 24 43
Barcelona 49 20Oslo 44 32
Toronto 30 63
Sydney 16 95
Vancouver 41 89
Tel Aviv 102 87
Miami 77 133
Strong infrastructure
platform
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The BUSINESS of CITIES
Improving brand with global audiences
33
City RepTrak Brand scores, 2015 • Strongreputation forvisitor andresidentamenities
• Distance fromkey markets
• Lacks global
stature, andreputation forpulse anddynamism
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The BUSINESS of CITIES
Imperative to grow innovation
34
AONPeople Risk
Index
2thinknowInnovation
Cities Index
IESE Cities inMotion 'Human
Capital'
IBM World’sMost
CompetitiveCities ‘LifeSciencesR&D and
Production’
IBM World'sMost
CompetitiveCities
'Software andWeb
Development'
No of Cities 138 445 148 100 100
Boston 10 4 2 - -
San Francisco 13 1 6 11 3
Munich - 7 20 - -
Seattle 21 10 - - -
Berlin 40 13 13 5 5
Toronto 3 11 36 14 9
Stockholm 15 16 57 4 6
Oslo 16 32 39 - -
Copenhagen 7 9 80 8 21
Helsinki 34 25 53 18 15
Melbourne 21 23 35 35 25
Miami 21 48 19 34 32Vancouver 10 39 59 32 17
Vienna 37 6 60 19 28
Barcelona 49 56 40 18 23
Sydney 27 17 48 36 30
Brisbane - 60 - - -
Denver 27 70 - - -
Tel Aviv45 24 67 39 44
Auckland 40 106 94 43 36
• Behind other new world citiesin terms of scale
BUT
Strong conditions for growth:ease of doing business,diversity, tolerance
High expenditure on R&D
Culture of entrepreneurship
(Source: Solidance)
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The BUSINESS of CITIES
Auckland - comments
Great progress in benchmarks scores-momentum. For a city of this size and location
Auckland is starting to punch above its weight.
Auckland does very well in JLL Momentum Index principally because of its diversepopulation, young population and its strong push towards tech, all key ingredients forreal estate attractiveness.
The strongest peers based on data to Auckland include Oslo, Vancouver and Helsinki.
Visitor and Destination Power is a reflection of volume of visitors and conferencesrather than attractiveness. Auckland is just outside top 100 cities for both inEuromonitor and ICCA rankings. Distance is key issue.
Auckland’s economic growth is due to:
(i) high in-migration boosting retail and housing demand,(ii) dynamic tourism growth,(iii) high foreign investment in real estate,(iv) a cost-competitive tech sector, and(v) services sectors concentrated in the CBD.
More effective use of land is seen as essential to sustain growth in the next cycle.
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The BUSINESS of CITIES
The real estate perspective
36
Established World Cities• Aim to capture footloose people and capital• Challenges: bold urban transformation to stay competitive, land
pressure, affordability, housing
Emerging World Cities• Need catalytic FDI, nurture local capital and talent• Massive Real Estate expansion under way.• Next phase: create a sense of place
New World Cit ies
• Want mobile millennials, students, entrepreneurs.• Millennials have stringent real estate demands• Innovative, sustainable, technologically advanced
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The BUSINESS of CITIES
Strategic
imperatives
for each
type of city
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The BUSINESS of CITIES
Strategic
imperatives
for each
type of city
38
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JLL Momentum Index
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The BUSINESS of CITIES
JLL Momentum Index
Highlights – The Rise of the Innovation-Oriented City
• Innovation-Oriented Cities Dominate the Top 20
• Strong Momentum of ‘Established World Cities’ andtheir ‘Challengers’
• Increasing Momentum in US ‘New World Cities’
• Innovation Driving ‘Agile Higher Value Emerging Cities’
• Smaller Cities Achieving Global Reach
• Asia Pacific showing Strength
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The BUSINESS of CITIES
City Momentum Index Model
41
Higher EducationInfrastructure
Innovation Capability
International PatentApplications
Technology / Venture Capital
Environmental Quality
High-Value
incubators
Short-Term
Momentum
Construction, Absorption,Price
Investment Transactions
Transparency
Commercial
Real Estate Momentum
Economic Output
Population
Air Connectivity
Fortune 2000 HQs
Foreign Direct Investment
Source: JLL, January 2016
Socio-Economic
Momentum
High-Value
incubators
City Momentum
Index
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The BUSINESS of CITIES
JLL City Momentum Index 2016 – Top 20
42
Population Connectivity Technology and R&D Education Environment
Economic Output Corporate Activity ConstructionReal Estate
InvestmentProperty Prices
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
London
Silicon Valley
DublinBangalore
Boston
Shanghai
New York
Sydney
Beijing
San Francisco
Nairobi
Shenzhen
SeattleTokyo
Nanjing
Austin
Hyderabad
Melbourne
Seoul
Auckland
JLL City Momentum Index 2016 Sub Index
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The BUSINESS of CITIES
JLL City Momentum Index 2016 – Sub-Index
Top 5
43
1
2
3
4
5
Future Proofing
Silicon Valley
London
Paris
Boston
Tokyo
1
2
3
4
5
Real Estate
Momentum
Dublin
London
Auckland
Nairobi
Boston
1
2
3
4
5
Socio-Economic
Dynamism
Hanoi
Bangalore
Ho Chi Minh City
Hyderabad
Delhi
Source: JLL, January 2016
Future Proofing: Higher education infrastructure; innovation capability; international patent applications; technology/venture capital;
environmental qualityReal Estate Momentum: Office and Retail construction, absorption and price; investment transactions; transparency
Socio-Economic D namism: Economic out ut o ulation air connectivit Fortune 2000 H s FDI
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The BUSINESS of CITIES
City Momentum Index 2016: Short v Long Term
44
Source: JLL, January 2016
Short - Term MomentumLowest Highest
Nairobi, Delhi
Nanjing, Xi’an
Hyderabad, Chennai
Dublin, Auckland
Shanghai, BeijingShenzhen, Bangalore
LondonSan Francisco Bay
Boston, New York
Sydney
Tokyo, Hong KongParis, Randstad
Seoul, Los Angeles
Melbourne, Austin
Singapore, TorontoBrussels, Chicago
Berlin, Taipei
Stockholm, San Diego
H i g h - V a l u e
I n c u b a t o r s
Lowest
Highest
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The BUSINESS of CITIES
City Momentum Index
45
Covers 120 Cities
Vancouver, Calgary, Toronto, Montreal
Washington DC, Baltimore,
Philadelphia, New York, Pittsburgh,
Boston
Minneapolis, Chicago, St Louis, Detroit
Charlotte, Atlanta, Orlando, Miami,
Tampa
Denver, Austin, Dallas, Houston
Las Vegas, Phoenix
Seattle, Portland, San Francisco,
Silicon Valley, Los Angeles, San Diego
North America 31
Mexico City
Lima, Bogota
Sao Paulo, Rio de Janeiro
Santiago, Buenos Aires
Latin America 7
Oslo, Stockholm, Copenhagen, Helsinki
Dublin, Glasgow, Edinburgh,
Manchester, Birmingham, London
Brussels, Randstad, Paris, Lyon
Hamburg, Berlin, Dusseldorf, Cologne,
Frankfurt, Stuttgart, Munich, Zurich,
Vienna, Luxembourg
Lisbon, Madrid, Barcelona
Milan, Rome, Athens
Prague, Budapest, Warsaw, Bucharest,
Kiev, Moscow, St Petersburg
Istanbul
Abu Dhabi, Dubai, Jeddah, Riyadh
Casablanca, Cairo
Cape Town, Johannesburg
Lagos, Nairobi
EMEA 48Seoul, Osaka, Tokyo
Beijing, Tianjin, Shanghai,
Chengdu, Wuhan, Guangzhou,
Shenzhen, Chongqing, Nanjing, Xian,
Shenyang
Hong Kong, Taipei
Delhi, Kolkata, Mumbai, Hyderabad,
Bangalore, Chennai
Bangkok, Ho Chi Minh City, Hanoi,
Kuala Lumpur, Singapore, Jakarta,
Manila
Perth, Brisbane, Melbourne, Sydney,
Auckland
Asia Pacific 34
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Auckland
Celebrate amazing progress….. And momentumRecognise externalities and organise for them.Shift from cycle 2 to cycle 3…….Map how the success model will change:
private amenity to shared liveabilitymix of densitiesgrowth of evening economy
New opportunities and catalysts. TPP?
Get the story clear at home and tell it abroad. Australia and NZ together? OBOR?Learn with peers