Global Mega Trends To Shape Real Estate Future – Asia Leads

At Schroders’ Global Real Estate Conference, held last week, Duncan Owen, Schroders’ Global Head of Real Estate, addressed an audience that represented pension funds, insurance companies, charities and wealth managers from across the globe, with his key mega trends that will drive Global Real Estate in the future.

Among the core topics Owen outlined were:

  • Rapid urbanisation – global cities will benefit most from growth. The UN forecasts there will be 40 global cities by 2025, already 60,000 people are moving to cities everyday in China and India
  • Shift from West to East – The E7, the largest emerging markets, are forecast to overtake the G7 by 2030, this will change demand for real estate in the East and the West
  • Demographics – life expectancy will continue to be longer, it is anticipated that by 2025 the population would have grown by 1 billion
  • Technological revolution – ecommerce, the internet and innovation is changing how people live and work, as well as how they shop and how services are provided. This is changing demand and the value of locations. For example, Alibaba has over 800,000 suppliers but does not manufacture and distribute as well as having 350 million customers without needing a shop.
  • Resource and Power – which buildings are energy efficient? Global demand will be 50% higher in 2030, the world will require 35% more food in 2030
Mark Callender, Head of Real Estate Research, presented ‘Big city, bright lights, better returns?’ He chose to focus on the urbanisation mega trend, which is set to dominate real estate growth in the future. It is predicted that Tokyo will retain its top position as the world’s most populated city in 2030. It will be quickly followed by Delhi, Shanghai and Mumbai. Callender cited the significance of London and Paris which although together accounted for less than 1% of the world’s population, collectively have accounted for 16% of the world’s office investment deals over the past 3 years.

It is also expected that these mega cities will continue to grow faster than their surrounding countries and they should deliver attractive returns for investors, so long as new building development remains subdued.

 

 

 

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