Global Cities Symposium: The Global City Today
McIntosh, Angus, Journal of Real Estate Portfolio Management
This article is based upon the talk given at the Global Cities conference in Boston, Ma, in September 2002. It looks at how we measure cities and the impact of Asia-Pacific on urban change. What is the role of cities today and are urban regions consolidating? Environmental sustainability is increasingly important and relate to various scenarios for the future. However, the city, and its place in history, is as important today as it was 2000 years ago.
One image of the city of the future is one dominated by global brands such as McDonald's, Coca Cola, Starbucks Coffee, and Kentucky Fried Chicken. All the residents drive global brand cars such as Ford or General Motors or Nissan or BMW and fly to and from cities in global brand aircraft designed by Boeing or the Euro Airbus.
Such images replace those of the cold war years between 1950 and 1990; thousands of land tanks facing each other across Europe or Asia have been replaced by the image of an invasion of corporate capitalism in every country of the world.
The simplistic way to measure cities is by their population. However, this raises various issues, such as defining what is the boundary of a city. Table 1 lists an economist view of the largest cities in the world, but ignores the concept of city regions. Both London and Paris are part of city regions exceeding 20 million people.
What is noticeable from the above is that the ranking of quality of life, with Vancouver being the attractive city in terms of quality of life, does not appear in large cities. Is there is an inverse correlation; large cities are not necessary good places to live?
ASIA-PACIFIC AND URBAN CHANGE
During the 1980s and 1990s "the Asia Tigers" cities grew enormously in terms of population and wealth including Mumbai, Calcutta and Shanghai shown above. As a result of financial deregulation and globalisation, Asia-Pacific saw extraordinary economic growth which resulted in their property markets growing in parallel. In the mid 1990s this process came to a halt. Several countries experienced a property slump and currency devaluations plus a series of banking crises. As a result, property rents fell. As Table 2 shows, in real terms industrial rental values are today considerably lower than they were seven years ago.
Further analysis from the King Sturge Global Trends Survey (Table 3) shows major rental differences for both the office and industrial markets across the world.
As Tables 2 and 3 show, industrial property has fallen in value in the Asia-Pacific region; it is nowadays seven times more expensive to rent an industrial building in London (next to Heathrow Airport) compared with Shanghai. However, even within Europe there are one or two areas, such as Lille, where industrial rents are moderately low. Likewise, in the office market it is much cheaper to rent an office building in Kuala Lumpur than in the UK.
This analysis tells us two things; certain major financial cities such as London and Hong Kong can command enormous rents relative to other locations in the world. …