The new science of citiesJuly 26, 2017 / By
City indices are more prevalent than ever. At the last count, we identified more than 300 indices that score, rank and benchmark cities on a diverse range of attributes from their education capacity and innovation potential, through to a city’s reputation and the quality of its nightlife.
Some of these indices are clearly more trustworthy than others, including our own outputs – such as JLL’s City Momentum Index and Investment Intensity Index. Yet, love them or loath them, these indices have a bearing on how we understand city dynamics, guiding investors, businesses and workers as they make location choices and shaping the viewpoints of visitors, students and entrepreneurs.
In our forthcoming report on city indices, due out in September, we outline ten trends which signal where cities are heading and where the real estate industry should be focusing:
1. Hidden Talents
‘Talent’ doesn’t just mean the proportion of citizens with degrees, or the concentration of universities. Talent attraction & retention – as well as specialisations and vocational skills – are also key. This is increasingly recognised in city benchmarking as a major driver in location decision-making.
2. Investing In Infrastructure
Transit coverage is important, but just as vital is frequency and reliability. Long-term underinvestment has led to long commutes, congestion and low levels of usage in many cities – while cities like Singapore have streaked ahead thanks to constant improvements. New infrastructure links present huge new opportunities for real estate.
3. Understanding Innovation
Different types of cities are achieving success in the ‘new economy’ through a number of varying pathways. Some cities such as Seoul and Tokyo excel in terms of corporate R&D, while others like Shenzhen have emerged as important start-up hubs. Recognising and embracing these different forms of innovation is vital.
4. Brand Building
Melbourne and Sydney are currently among the leading cities for brand and reputation, but even the smallest cities are building internationally recognised niches and developing brands to represent them across the globe. Reputation is becoming key in attracting businesses, talent and visitors; and cities are using innovative real estate and impressive skylines to project their brand and identities.
5. Thinking Long-Term
Cities are facing a range of long-term challenges, including pollution, environmental degradation and climate change. The most attractive cities will be those which recognise and tackle these eventualities. Real estate investors are becoming increasingly attuned to issues of resilience, sustainability and future proofing.
6. Keeping It Affordable
Most leading cities are becoming less affordable – just think of residential prices in Hong Kong, Sydney and Vancouver. Cities must be aware of tipping points where lack of affordability outweighs the benefits of being located there.
7. Ensuring Transparency
JLL’s Global Real Estate Transparency Index outlines the importance of transparency in a city’s real estate market – and this holds true beyond our own sector. Cities are increasingly being differentiated by their business environments and the level of risk.
8. Creating a Well Run City
Good governance is critical for cities managing their growth. Metropolitan-level governance, institutional accountability and e-government are increasingly featuring in debates. Real estate markets, in particular, are impacted by long-term visions, co-ordinated planning and the ability of cities to act as stable partners.
9. Being Smart
‘Smartness’ is one of the buzzwords in city development. A small number of cities are forging ahead with long-term strategies and integrated interventions, which they hope will lead to new efficiency in city operations – from traffic to waste.
10. Competition is Global
The range of new indices highlights just how global the ‘science of cities’ has become. New rankings emerge from diverse regions, while new cities are constantly being flagged as ‘ones to watch’.
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