Eight key themes shaping our future cities

8 key themes shaping our

future cities

The global pandemic

An obvious starting point, but the enduring influence of COVID cannot be ignored. A prolonged period of uncertainty such as this is no time for making definitive statements on the future. Rather, we believe that corporate leaders and policy makers should take a scenario approach, asking what if, not stating what will, to ensure future resilience and adaptability for our cities against a range of political, social, economic, and environmental factors�

Smart cities technology

We have the technology and capability to collect data – and it’s important that this data is used to inform policy makers on better decision-making to improve the quality of life. Auckland is the only city from New Zealand or Australia to feature in Technology Magazine’s Top 10 Global Smart Cities, while Wellington has been recognised by Cognizant as one of the ‘21 Places of the Future’ for high-tech jobs� Based on this, we have a running start on the race to the future�

Flexible work practices

COVID has shown us that we can be productive from a variety of settings, not just the traditional office. The hybrid work model is here to stay and will be a constant around which company culture must adapt� We go into more detail on this over the page, but initial observations are that the 45+ range of workers may be happier to work at home, whereas younger employees, who want to learn through osmosis and perhaps don’t have a home environment that lends itself to productive remote working, may want more time in the office.

Consumption patterns

This is not just an e-commerce story� The oldest part of Gen Z has just turned 25, which means our largest consumer audience is also our most socially aware and connected� Retailers have responded to the inexorable rise of the conscious consumer by prioritising transparency and providing visibility of supply-chain logistics to prove ethical and equitable treatment of everyone connected to the provenance of the goods or service�

Environmental, Social, and Governance (ESG)

New Zealand always ranks highly on JLL’s Transparency Index, coming in at #6 in our most recent iteration among other countries like France, Canada, and the United Kingdom. But drilling into the data, we find that there are countries ranking lower overall, such as the Netherlands, Ireland, Sweden, and Singapore that actually outperform New Zealand on transparency around sustainability, so there is plenty of room for improvement here�

Social infrastructure

As we heard from Emma McInnes at our Wellington event, cities can only be considered great when they are designed for everyone� For our cities to endure into the future, they must be inclusive and appeal to a broad demographic profile. Social infrastructure is not an engineering construct, it’s a reflection of diverse and inspiring leadership that makes decisions in the interests of all its citizens�

Built form adaptability

“We shape our buildings; thereafter they shape us.” The famous Winston Churchill quote can still ring true, but the relationship between person and property requires ever greater fluidity. A sustainable future city needs to consider the response of buildings to the changing needs of both owners and users, and the demand of external factors over the life cycle of the asset�

Real estate asset pricing

The recent convergence in global bond yields has taken away the significant spread in the risk-free rate that we used to see between New Zealand and other mature economies� This has important implications in terms of how we differentiate asset prices between different cities and geographies. With implied market risk premium an increasingly influential factor, our view is that the return expectations or requirements from real estate investment from global capital sources in New Zealand will be lower�

Reproduced by permission JLL New Zealand - www.jll.nz August 2021 Managing Director Todd Lauchlan Head of Research Gavin Read Auckland 09 366 1666 Wellington 04 499 1666 Christchurch 03 375 6600