The retirement of Baby Boomers and the debut of Generation Z workers, along with other demographic shifts, has major implications for real estate occupiers, investors and policy-makers around the world according to a new global research report from Cushman & Wakefield (NYSE: CWK). All stakeholders need to understand the impacts of these trends and how to position themselves to maximise opportunities.
Entitled “Demographic Shifts: The World in 2030”, the report analyses the seismic shifts in workforces worldwide as 693 million Baby Boomers reach retirement age and 1.3 billion members of Gen Z enter the labour force over the next 10 years.
The report looks at the different approaches to work and lifestyle taken by Baby Boomers, Millennials and Gen Z around the world, and the impact on the world’s cities over the next decade as one generation exits the workforce and another enters.
“These demographic trends will drive the pace of growth in cities around the world,” said Dr. Dominic Brown, report author and Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield. “Cities will need to establish themselves as ‘places’ to attract the highest quality workers and in turn create the greatest real estate opportunities for occupiers and investors alike.”
Keith Hardman, International Partner and Head of Cushman & Wakefield’s Leeds office commented on the findings: “Leeds is particularly well placed to positively respond to the various challenges presented by the demographic shifts of which inclusive growth is a priority. At 253 ha, the South Bank area of Leeds represents one of the largest strategic regeneration opportunities in the country which is set to double the size and transform the City Centre over the next 20 years.”
Leeds City Council’s Strategic Framework sets out the ambition ‘to double the economic impact of the city centre by transforming the South Bank into a distinctive and leading Global destination for investment, sustainable living, learning, culture, creativity and leisure’. Key objectives include:
- 35,000 jobs across key sectors such as financial and professional, creative and digital and new emerging sectors.
- at least 8,000 homes in a sustainable location with a mix of tenures
- Delivery of a new integrated high-speed rail station integrating both HS2 and Northern Powerhouse Rail
- Creation of a new urban park
- Repurposing iconic historic assets such as Temple Works and Hunslet Mill
Keith Hardman continued: “South Bank represents a major regeneration opportunity that will drive growth ambitions and in particular facilitate the Council’s priority for achieving ‘inclusive growth’, where success will not only be judged on the scale commercial floor space or the number of homes that are built, but the extent to which local communities are able to derive benefit from the growth. This means creating a highly skilled workforce which is representative and offers opportunities for all, is inclusive and connects people to jobs by improving links between the South Bank and surrounding neighbourhoods thereby raising skills levels, and strengthening connections between employers, schools and local people.”
Cushman & Wakefield compared labour force growth and GDP growth of more than 137 cities worldwide. Cities with high growth in both categories have the best prospects for strong real estate demand, while slow growth in both categories indicates a lagging market. Cities with faster growth in GDP than in the working-age population are “high productivity” markets that may appeal to investors as they rise up the value proposition. Those with greater growth in labour than GDP are considered “low productivity” markets need to harness that attraction of talent to boost output.
The study concluded that the world’s top-performing cities are located in South East Asia and India, which bodes well for the economic growth and strength of real estate markets in these areas. High productivity cities are located mainly in China. Most cities in Europe and North America – more mature markets – ranked as low productivity or lagging markets for economic and real estate growth and their trajectories need to be assessed accordingly.
