The urbanisation trend has bounced back unscathed from the pandemic, delegates heard at Real Asset Media’s Global Capital Flows & Winning Cities briefing, which took place at MIPIM in Cannes yesterday.
“The winning cities that were strong before the pandemic have not lost their momentum”, said Pertti Vanhanen, Managing Director Europe, Cromwell Property Group. “People moved out of Paris or London during the health crisis, but now they have gone back and these cities have regained their vibe”.
The formula for a winning city has remained the same: a combination of factors that include location, infrastructure, a strong economy, job opportunities and above all people.
Not only have the top locations not lost their attractiveness or liveability, but more cities are joining their ranks.
“The UK is finally becoming less London-centric”, said Gail Mayhew, Managing Director, BCP FuturePlaces. “We are seeing the emergence of other cities, mainly University towns that are also creating jobs. What really matters ultimately is a good quality of life and a place that works for all generations”.
That goal is difficult to reach in practice, as providing a context that caters equally well for the young and the elderly is a challenge, especially in an urban context.
“In our view as long-term investors, tech and an ageing population are the two main trends that are changing the shape of real estate”, said Simone Pozzato, Managing Director and Fund Manager, Investment Management, Hines. “I think the cities of the future will be younger and less inclusive, as they will become dynamic, fast-moving centres of gravity that will push out the seniors. London is full again now, but many 60-plus year-olds have moved to the country or the seaside”.
The power of tech to attract talent, drive innovation and generate economic growth will determine which are the winning cities of the future.
“Tech is attracting a young population and creating jobs”, said Pozzato. “We see it in Paris and Amsterdam and London, but it’s most visible in Dublin, where you keep building but it’s never enough because the demand keeps growing. And today’s 20 year-olds in ten years’ time will settle and marry and have children so that growth will continue”
Demographics is the biggest driver, said Ahmed Shalaby, President & CEO, Tatweer Misr: “Egypt has become an attractive investment destination because of its strong population growth and high percentage of young people”.
Cities have bounced back but the long-term effects of the pandemic are still to be discovered, said Mahyew: “Covid was a real watershed. It challenged locational dynamics, but we’re still working through that and trying to understand its impact”.