28 Mar 2017
Day two of the World Built Environment Forum Annual Summit in Shanghai saw the focus shift from geopolitics and macro trends towards cities that are resilient and smart, as well as the market dynamics driving investment into China and the factors drawing Chinese capital abroad.
Half of the world’s infrastructure expected to be in place by 2070 has not yet been built. But the world will have changed dramatically by then, so we need to understand now what the future infrastructure needs will be, and how to build infrastructure that is itself resilient while adding to a city’s overall resilience.
Participants heard case studies from Semarang (Indonesia), Bangkok and Yiwu (China) on how cities could become resilient against long term socio-economic trends, natural disasters and a changing climate. The key first step was to appoint a Chief Resilience Officer who needed to be a masterful connector, strategic adviser, broker and talented engager of communities. Today there are fewer than 70 CROs worldwide, but we are likely to need tens of thousands.
We have a once in lifetime opportunity to build better.
What makes a city smart?
Vendor-based smart cities, based on IT products are not enough. We need an approach that is co-created with citizens.
Speakers argued that a focus on big data was not always helpful. Cities needed good quality information: accessible, reliable and relevant. Nor should technology lead the development of smart cities – rather it should enhance them. Nonetheless data and technology were key components, requiring responsible handling, common standards and rigour.
A developer and owner perspective
Property will need to adapt to the needs of Netizens.
Participants then turned their focus towards the Chinese real estate market. Tier one cities were experiencing tremendous demand, rapid change and shortage of Grade A office space. Growth in Tier two was expected to accelerate, with Tier three and four cities increasingly competing on the basis of quality of life. In commercial property, panellists noted demand growth for advanced manufacturing sites and service providers.
Chinese commercial property had grown 300-400% over 10 years, with average growth of 16% since the post-GFC stimulus.
Commercial space was adapting to occupiers’ flexible working practices, and new landlord models, with non-rental revenue streams were beginning to emerge. There was a noticeable shift towards mixed-use developments and planning buildings with consideration for the local context and impacts on community spaces.
Chinese investors look outwards
China has become an exporter of capital.
Chinese investors were gaining confidence through better understanding of domestic and foreign markets, more sophisticated risk profiling and more professional financial management. Foreign markets offered scope to spread risk, diversify portfolios, hedge against foreign exchange movements and to invest at scale: US/ New York, London and Australia were especially attractive. Chinese investors also valued historic ties, a shared culture and mutual understanding such as with Malaysia.
Chinese investors were prepared to enter higher risk markets for a good return on investment, but sought to mitigate the risks through consistent standards for valuation, cost modelling and project management.
While foreign governments wanted to attract Chinese investment in order to create jobs, and economic development, there were concerns about the potential impact of capital controls.
That's a wrap: WBEF highlights
The World Built Environment Forum
Across the two days of this Annual Summit, key decision-makers from across the industry and from around the globe discussed how global trends are likely to affect us all, and looked at best practice from the world’s leading gateway cities.
Key global challenges, such as how to ensure a project is investible, how China’s cities can attract foreign direct investment, how cities outside China will attract Chinese investors, and how cities outside Asia will attract Asian investors, were brought to the table, triggering original and thought-provoking discussions.
The next World Built Environment Forum Annual Summit takes place in London between 23–24 April 2018. Register your interest to participate here.
Only Registered Members and Registered site users can comment on our content.
Please use the log in button to sign in and leave your comment.
Read the next page in this section