Auckland a ‘new world’ for global property investors

5:03 AM Saturday May 21, 2016 Colin Taylor

Auckland is recognised globally as a business hub which is attractive to real estate investors.

Auckland often has an impressive placing as a ‘new world city’ in global rankings of major metropolitan centres that are attractive to real estate investors, says Dr Megan Walters, head of research for JLL’s Asia Pacific Capital Markets business, based in Singapore.

Dr Walters is one of 86 presenters invited to speak at Tech Week that comprised 55 events held in Auckland from May 14-22. A Fellow of the Royal Institution of Chartered Surveyors, she has more than 25 years’ experience in real estate.

“Auckland is recognised as a business hub that is increasingly innovative and tech-focused,” says Dr Walters who highlighted the link between investment in real estate, global capital flows and technologically advanced cities.

As an example Auckland placed seventh in the JLL Investment Intensity Index which compares the volume of direct real estate investment relative to the economic size of a city. 

Auckland’s strengths are also highlighted in Globalisation and Competition: The New World of Cities. Published by JLL’s Cities Research Centre, the report compares ‘established’ world cities to emerging and ‘new world’ cities.

Dr Walters says the new world cities are home to many ‘millennials’ – the generation that reached adulthood around the year 2000. 

“This is a demographic group that is demanding less conventional real estate – with a preference for character properties and locations in vibrant mixed-use neighbourhoods.

“New world cities are proving to be particularly attractive for real estate investors who are taking into consideration issues of liveability, sustainability and technological prowess in their strategic decision-making,” Dr Walters says.

“Relative to their size, new world cities attract a disproportionate share of global investment as investors look for value beyond the established and emerging world cities.”

These new world cities all have robust technology sectors supported by a high quality of life and strong environmental credentials - factors which are increasingly being incorporated, either explicitly or implicitly, into real estate investment strategies.”

Dr Walters says Auckland, “which has notably made it an ambition to become the most liveable city in the world,” is now third on Mercer’s Quality of Living survey which ranks around 220 cities on 39 factors including political, economic, environmental, personal safety, health, education, transportation and other public service factors. 

The survey is conducted to help governments and major companies place employees on international assignments.

“Auckland is also an impressive third of 69 cities on the UN-Habitat’s Environment sub-index, which acknowledges a city’s efforts to protect natural assets while ensuring growth,” Dr Walters says.

She says JLL’s Cities Research Centre earlier this year published its third City Momentum Index. “This tracks the speed of change of a city’s economy and commercial real estate market - identifying those cities having the most dynamic urban economies and adapting most rapidly to technological and infrastructural transformation.”

Covering 120 major established and emerging business hubs across the globe, the JLL index places Auckland 20th, behind Sydney at 8th and Melbourne at 18th

“The City Momentum Index captures the dynamics of a city’s real estate market – its rates of construction and absorption, price movement and the attraction of a city’s built environment for cross-border capital and corporations,” says Dr Walters.

“The remarkable feature of the index’s Top 20 is the overwhelming dominance of innovation-rich cities. City momentum involves far more than just raw gross domestic product growth – it is crucially about building the foundations of an innovation-oriented economy through technology, creating cutting-edge new businesses, attracting talent and nurturing vibrant inclusive communities.

“Many of the cities at the top of this year’s index such as London, New York, San Francisco and Boston, are home to the world’s most dynamic mixed-used districts that are thriving through their ability to incubate and commercialise new ideas. These compact and well-connected city districts promote connectivity, co-production and open innovation.

“And what bonds them together is real estate.”

Dr Walters, an international director at JLL, is responsible for client advisory to investors and publications on office, retail and industrial real estate trends in capital markets.

A frequent speaker at conferences both in Asia Pacific and globally, she sits on the research committees of the Asia Pacific Real Estate Association (APREA) andANREV - the Asian association for investors in Non-listed Real Estate Vehicles – which is dedicated to sharing knowledge on the non-listed real estate funds sector.

Dr Walters is also the women’s leadership representative for Asia Pacific on the global committee of the Women’s Leadership Initiative (WLI) of the Urban Land Institute(ULI) which seeks to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.

She holds a PhD in real estate economics from the University of Hong Kong.

True Commercial - Dr Megan Walters.jpg

Dr Megan Walters, head of research for JLL’s Asia Pacific Capital Markets.