In Asia, city competitiveness and quality of life outrank economic clout when it comes to commercial real estate decisions.

 

Several Asian cities are emerging as competitive real estate markets, according to global real estate consultancy JLL, as investors and occupiers increasingly weigh factors like quality of life, creativity, sustainability, governance, and durability in their investment and location decisions. housing

According to the new research from the real estate consultancy for The Business of Cities, a city's economic dynamics are no longer the primary attraction. Overall competition, which the firm assessed across more than 500 indices, is more important to investors and occupiers.

According to Stuart Crow, CEO of JLL Asia Pacific's Capital Markets, "More capital is flowing into Asian economies with advantages in terms of quality of life, creativity, and institutional power. Over the last three years, 'Developed World Cities' with strengths like Singapore, Tokyo, Seoul, Beijing, Shanghai, Hong Kong, and Sydney have attracted a total of US$65.3 billion."

"Our clients tell us that, beyond top-tier city stability, they're looking for markets that are creating new platforms for innovation and successful resilience strategies," he continues.

Guangzhou, Shenzhen, Taipei, Nanjing, Mumbai, Kuala Lumpur, Bangkok, and Delhi are among the 'Emerging World Cities' to watch in Asia, according to the study, as they continue to serve a higher level of domestic demand and gain experience as international trade and capital gateways. Guangzhou and Shenzhen, in particular, have earned a total of US$1.6 billion in international real estate investments this year.

"We pinpointed the main patterns that will matter most for our clients by sifting through more than 500 city indices," says Jeremy Kelly, Director, Global Research at JLL. "As a result of technological disruption, increasing concerns about climate change, and global conflicts, what companies want from cities is evolving. Looking ahead, new economic models would have a major effect on the global city environment."

JLL points out that, in addition to a city's overall competitiveness, those cities that effectively adapt to new economic models will benefit from new sources of real estate demand and draw more cross-border investment, as follows:

Locations must become more versatile, maximize space, and break down barriers between building uses in order to thrive in the innovation economy. The model re-emphasizes the importance of central business locations for collaboration, creativity, clustering, and commercialization.

The experience economy raises consumer standards for on-demand services, thrives on personalized interactions made possible by data collection, and encourages the concentration of a diverse range of activities in high-amenity areas.

The sharing economy encourages the emergence of new living and working practices (such as co-working and co-living), increases demand for easily reconfigurable locations among fast-moving tenants, and boosts returns from efficient room and asset utilization.

Buildings must become more operationally effective and robust as part of the circular economy, as well as achieve greater density through shared occupancy and longer asset lifespans.