Australia may be a “magnet” for investment, but competition for international capital is intense, says JLL’s CEO Stephen Conry. Easing the growing pains in our cities is essential for our future prosperity.
If the Australian Bureau of Statistics’ predictions are on the money, we will add another 10 million people to our population by 2043. And most of these will be urban denizens who flock to our four biggest cities.
How do we manage that growth so that communities roll out the welcome mat rather than stick up the “we’re full” sign?
Passionate about cities, JLL’s Conry has been pondering this question for some time. Since entering the
“Growth is an exciting and transformative opportunity – but it must be handled proactively,” Conry says.
“Australia is a magnet for foreign investment in real estate, with our research showing 36 per cent of all Australian commercial sales in 2018 were to offshore buyers. But Australian cities need to future proof to remain competitive.”
The cities which make up JLL’s latest Global300 – 300 cities that are the focus of commercial real estate activity – are home to 18 per cent of the world’s population but 80 per cent of office stock, generate 40 per cent of GDP but attract 70 per cent of cross-border investment.
In Australia’s case, cities generate around 80 per cent of economic activity, Conry adds.
“Competition for global capital is intense and we need that investment in Australia. Smart growth is essential. We must encourage and support an approach that maintains a high quality of life for residents and enhances existing city benefits and assets.”
JLL and The Business of Cities, an urban intelligence firm led by Professor Greg Clark CBE, have reviewed hundreds of city indices to identify 10 “imperatives” for a successful city, Conry explains.
“These range from fostering innovation and investing in infrastructure, through to ensuring transparency and building a unique brand.”
JLL’s Global300 puts Sydney in the top 30, while Melbourne and Brisbane come in the top 100.
Over the last few years, Sydney has risen up JLL’s rankings to compete with the largest and most globally-connected cities and has now “entered the ‘Contenders’ category’,” alongside Beijing, Shanghai, Amsterdam, San Francisco, Toronto, Madrid, Los Angeles, Chicago and Washington DC.
“Some of the key strengths of Sydney include quality of life, transparency, high levels of direct real estate investment and the city’s global reputation.”
But Sydney’s attractiveness as an investment destination is at risk after decades of under-investment in infrastructure.
“Cities like Sydney need to work hard to remain globally competitive – addressing issues such as long commute times, congestion and low public transport usage and coverage are key,” Conry says.
The Property Council’s Creating Great Australian Cities report series, authored by Clark in 2018, reinforces Conry’s point. Clark found Australia’s cities – notably Sydney, Melbourne, Brisbane and Perth – fare well in terms of brand, environment, education and tourism, but are falling behind in infrastructure investment, densification, efficiency of land use, commuting times and distance to amenities. Clark also found Melbourne, Brisbane and Perth are establishing themselves as “New World Cities”.
Just last week, a study from the UNSW City Futures Research Centre found living closer to job markets reduces travel times and costs to households, increases labour supply and job mobility and leads to higher incomes over time. The study found that moving workers close to a wider range of jobs would lead to a $17.57 billion boost to the NSW economy over 40 years.
Conry says transport, connectivity, data, commerce and business-to-business mobility are at the heart of smart growth. He’s supportive of City Deals which align the planning and investment interests of three tiers of government to “accelerate growth, drive economic reforms, stimulate urban renewal and create jobs”.
Prioritising major infrastructure projects demands an “all-of-government” approach, Conry adds.
“Too often we see a breakdown in coordination across local, state and federal jurisdictions result in lost or deferred opportunities to deliver city outcomes.”
JLL is currently involved in some of Australia’s largest infrastructure projects, including various Sydney Metro projects and Cross River Rail in Brisbane.
“Infrastructure is a great enabler for unlocking density, but density is not the panacea of growth,” Conry cautions.
“Urban form should not be homogenous or built to a formula. It should support growth while preserving and developing communities and places. Maintaining the fabric of communities is a significant driver of success.”
And it’s that success that will help ease the growing pains of our cities.
Join Stephen Conry and other business leaders, including Charter Hall’s David Harrison, Mirvac’s Susan Lloyd-Hurwitz, Stockland’s Mark Steinert and the incoming CEO of Infrastructure Australia, Romilly Madew AO, at the Future Cities Summit at Hilton Sydney on Friday, 24 May. Register now to attend.