urban vs. rural population make-up bangladesh 4. karachi, pakistan 5. ho chi minh city, vietnam...
TRANSCRIPT
The urban project has a beginning and an end
Urban vs. rural population make-up
Note: Urban vs. rural defined according to the criteria used by each area or country Source: The Economist (1800); UN – Dept of Economic and Social Affairs – Population Division (1950-2050); Fuller, B./ Romer, P, Urbanization as Opportunity (2100)
1
3%
30%
47%
66%
80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1800 1950 2000 2050 2100
Year Urban Residents (bn)
Rural Residents (bn)
2010 3.6 3.3
2110 9.0 2.0
Change from 2010
+5.4 -1.3
Note: “Less Developed” / “More Developed” refers to the development stage of various regions of the world Source: Fuller, B./ Romer, P, Urbanization as Opportunity
Observed and projected number of new urban residents
We are entering a period of unprecedented urban growth
Urban growth will lead to a dramatic rise in the size and number of cities
Note: Cities with fewer than 1mn inhabitants are not reflected in the figures above Source:World Bank, UN – Department of Economic and Social Affairs – Population Division
Population of Southern Europe
Population of South America
New Inhabitants 360mn 149mn 386mn
Population of North America Population of
North America Equal To…
Number of cities in 2010 and 2030 by city size
Thicker Labor Markets & Company
Formation Learning, Innovation, &
Increased Skills
Higher Productivity
Increased Wealth and Tax Base
New / Better Infrastructure &
Amenities
New Arrivals of People &
Companies
The virtuous growth cycle of cities
Source: Glaeser, E. Triumph of the City; The Economist; interview with Dr. Paul Romer
The transition from agriculture to manufacturing and services drives people to cities, which in turn begins a virtuous cycle…
A city’s stage of development helps assess real estate investment opportunities
Source: Oxford Economics; Pramerica Real Estate Investors
Emerging Economies
“Basic Needs”
• Residential
• Retail
Developed Economies
“Services Economy”
• Office
• Retail
Maturing Economies
“Development”
• Retail
• Office
Forecasted metro area GDP per capita - 2025
0%
25%
50%
75%
100%
0 20,000 40,000 60,000 80,000 100,000 120,000
GDP per Capita 2025 ($US)
Percentile
Tianjin
Tokyo Shenzhen
Guangzhou
Sao Paulo
New York
Los Angeles London
Chongqing
Shanghai
Beijing Istanbul
Mexico City Linyi
Manila
Ho Chi Minh City
Baoding
Jakarta
Delhi
Mumbai
• Logistics
• Residential • Residential
The relevant set of consumer goods & services are tied to the wealth prospects of a city
$200 per day Luxury items such as travel, fashion, & wine; wealth management
$150 per day Electronics & appliances; broad range of financial services
$100 per day Dining out; spending more on transport & communications; retail banking
$50 per day Starting to dine out; using beauty products & detergent; financial services for un-banked / under-banked
$15 per day Basic necessities like food, clothing, & shoes
Source: World Bank – Global Consumption Database; McKinsey Global Institute
Average GDP per capita ($US, daily)
Investors can access investment opportunities related to urban expansion in 4 primary areas
Source: McKinsey Global Institute; A.T. Kearney; PwC; CCAFS
Urban Infrastructure
Global need for infrastructure estimated at over $50tr through 2030, much of it in urban areas
Agriculture Supply Chain
Food demand projected to grow 50-70% by 2050; rural population expected to decline by over 1bn by end of century
Global stock of institutional-grade real estate to expand from $30tr in 2012 to $70tr in 2030
Real Estate
Annual global demand in personal consumption expected to be over $40tr by 2020
Consumer Goods & Services
Summary of investment ideas: where and when to invest
Source: PIM analysis
Analyzing city-level data may help identify target cities for a variety of investor objectives
Source: 1 United Nations; 2 Oxford Economics; 3 Globalization and World Cities Research Network; 4 Economist Intelligence Unit; 5 2thinknow; 6 Centre for International Competitiveness
Illustrative Groupings
Economically Successful
1. Kuala Lumpur, Malaysia
2. Taipei, Taiwan
3. Singapore, Singapore
4. Hong Kong, SAR, China
5. New York, USA
Innovative
1. Boston, USA
2. San Francisco, USA
3. Beijing, China
4. Stockholm, Sweden
5. London, UK
Potentially At-risk
1. Nairobi, Kenya
2. Lagos, Nigeria
3. Dhaka, Bangladesh
4. Karachi, Pakistan
5. Ho Chi Minh City, Vietnam
Methodology / Weighting
25% equal weightings of:
City population growth rate, 2015-201
City real GDP growth rate, 2015-202
Count of office locations of global firms3
Competitiveness Index4
20% equal weightings of:
City population growth rate, 2015-201
City real GDP growth rate, 2015-202
Innovation Index5
Livability Index4
Knowledge Index6
20% equal weightings of:
City population growth rate, 2015-201 (high growth)
City real GDP growth rate, 2015-202 (low growth)
Livability Index4 (low score)
Competitiveness Index4 (low score)
City Crime Index5 (high score)
The Rock, Bury, UK – building 233 units 141,200 sq ft1
1) By May 2015; 66 units over 42,100 sq ft built to date
Central Park, Dublin County, Ireland – 272 units 258,000 sq ft
Alliance Building, Dublin, Ireland – 210 units 146,00 sq ft
Clancy Quay, Dublin, Ireland – 420 units 377,000 sq ft
Liffey Trust, Dublin, Ireland – 81 units 65,000 sq ft
Bailey Farm, Washington, USA – 372 units 326,000 sq ft
U.S. center cities and walkable suburbs attract a large share of
metro venture capital investment
0 10 20 30 40 50 60 70 80 90 100
San Francisco, CA
San Jose, CA
Boston-Cambridge, MA
New York, NY
Los Angeles, CA
Washington, D.C.
San Diego, CA
Chicago, IL
Austin, TX
Seattle, WA
Center city Walkable suburbs OtherPercent of VC investment
Source: Martin Prosperity Institute.
8.5
5.0
3.3
3.0
2.4
1.1
0.9
0.7
0.6
0.6
Total VC investment (US$ billions)
Recent trends in car and transit use may point to a shift in
transportation preferences
90
95
100
105
110
115
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Index, Jan. 2000 = 100
Vehicle miles traveled
Transit ridership
Sources: American Public Transit Association, U.S. Department of Transportation: Federal Highway Administration.
Milken Institute Best-Performing Cities - United States
Top 10 in 2013
1 Austin-Round Rock-San Marcos, TX
2 Provo-Orem, UT
3 San Francisco-San Mateo-Redwood City, CA
4 San Jose-Sunnyvale-Santa Clara, CA
5 Salt Lake City, UT
6 Seattle-Bellevue-Everett, WA
7 Dallas-Plano-Irving, TX
8 Houston-Sugar Land-Baytown, TX
9 Boulder, CO
10 Greeley, CO
Source: Milken Institute.
Milken Institute Best-Performing Cities - Asia
Top 10 in 2014
1 Shenzhen (Guangdong), China
2 Guangzhou (Guangdong), China
3 Chengdu (Sichuan), China
4 Tianjin, China
5 Delhi, India
6 Kuala Lumpur, Malaysia
7 Beijing, China
8 Singapore, Singapore
9 Ho Chi Minh City, Vietnam
10 Shanghai, China
Source: Milken Institute.
Milken Institute Best Cities for Successful Aging
Top 5 in 2012
1 Provo-Orem, UT
2 Madison, WI
3 Omaha-Council Bluffs, NE-IA
4 Boston-Cambridge-Quincy, MA-NH
5 New York-Northern New Jersey-Long Island, NY-NJ-PA
Source: Milken Institute.
Rapid growth of U.S. population age 65+ in major metros Projected growth rates
Sources: Brookings, U.S. Census Bureau.
0
2
4
6
8
10
12
14
16
18
2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 2025-2030
Percent
Philadelphia
Chicago
New York
Los Angeles
Aging of the world population
Sources: U.S. Census Bureau, Milken Institute. * Projected. .
965
1,209
1,370
530
734
986
49 73 105
0
200
400
600
800
1,000
1,200
1,400
1,600
2013 2023* 2033*
Millions
Mil
lio
ns
50-64
65-84
85+
Urbanization is bringing people closer to economic opportunity Share of rural vs. urban population by region, 2011
31 40
45 51
71 73 79 82
69 60 55 49 29 27 21 18
0
20
40
60
80
100
India Africa Asia China Oceania Europe LatinAmerica
NorthAmerica
Urban RuralPercent
Source: United Nations.
Source: Via Imgur
There are more people
living inside this circle
than outside of it.
Projected population by continent
0
1
2
3
4
5
6
2010 2025* 2040* 2055* 2070* 2085* 2100*
Billions
Asia
Africa
Europe South America
North America
Sources: Washington Post, United Nations. * Projection
Projected population growth of biggest countries
Sources: Washington Post, United Nations.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090* 2100*
Indonesia
Millions
India
China
Nigeria United States
* Projection
Population of Asia and Africa from 1950 to 2100
Billions
Sources: Washington Post, United Nations.
0
1
2
3
4
5
1950 1965 1980 1995 2010 2025* 2040* 2055* 2070* 2085* 2100*
Asia
Africa
* Projection
Population of African countries
Millions
Sources: Washington Post, United Nations.
0
50
100
150
200
250
300
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090* 2100*
Tanzania DR Congo
Ethiopia Egypt
S. Africa
* Projection
Population by development level
Millions
Sources: Washington Post, United Nations.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090* 2100*
Developing countries
Least developed
India
Developed China
* Projection
Population of developed nations
Millions
Sources: Washington Post, United Nations.
0
50
100
150
200
250
300
350
400
450
500
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090* 2100*
United States
Japan United Kingdom
Germany
South Korea
* Projection
Population of developed nations
Millions
Sources: Washington Post, United Nations.
0
20
40
60
80
100
120
140
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090* 2100*
Japan
France
United Kingdom
Germany
South Korea
* Projection
Life expectancy at birth
Years
Sources: Washington Post, United Nations.
50
55
60
65
70
75
80
85
90
2000 2010 2020* 2030* 2040* 2050* 2060* 2070* 2080* 2090*
N. America
Europe
S. America
Asia
Africa
* Projection
Dependency ratio Percentage of the population under age 15 or over age 65
Percent
Sources: Washington Post, United Nations.
40
45
50
55
60
65
70
75
80
85
90
2000 2015* 2030* 2045* 2060* 2075* 2090*
S. America
Europe
N. America
Asia
Africa
* Projection
The equivalent of the
population of England
moves from the
interior of China to
the eastern cities
every year.
> 50%
< 50%
1900: Countries more than 50% urban
> 50%
< 50%
2000: Countries more than 50% urban
Growth of urban centers in Africa
In Africa, only 28% of the
population lived in cities in
the 1980s.
By 2011, 40% lived in cities.
Nairobi
Source: United Nations.