Despite exceptional technical innovation, big data and artificial intelligence, the future remains unpredictable. How can cities guard against uncertainty and create long-term sustainability?
Some trends, such as population growth and urbanisation are longer in duration and therefore easier to plan for. However, in recent years, acute incidents such as natural disasters, cyberattacks, terrorism, and the effects of climate change have occurred at an increasing frequency. The resulting impacts on the human, economic and commercial prospects of cities in the region is immense. As the costs associated with inaction are only set to rise, the urgency for cities to strengthen their plans and implement the necessary precautions is evident.
Given that real estate is a pillar of the regional economy, coupled with the massive amounts of ongoing investment in the built environment, the real estate industry can play a direct role in making cities better prepared for the future.
The current state of preparedness of 17 major cities in the APAC region according to a range of macroeconomic, structural, defensive and social indicators, including factors in the built environment, have been tallied and analysed in Cushman & Wakefield’s inaugural Prepped Cities Index for 2018.
The Prepped Cities Index is designed to inform stakeholders – at the national, city and building level – of areas of strength and weakness to best prepare for the future. Although the index indicates that certain cities are currently at different stages of being prepared, many improvements could be adopted by all to mitigate the impact that an adverse event would likely cause, including to the built environment. Cities that rank lower in specific categories would be advised to identify and pursue relevant policies that guide the activities and decision making of the leading cities in the index. Doing this will help prioritise the factors across a real estate portfolio that need most attention.
The cities best prepared to address unexpected events typically hold property assets that are modern, institutionally owned, sustainable, and less susceptible to pricing volatility. Occupiers, specifically, would be advised to adopt a proactive approach to their corporate real estate (CRE) portfolio strategy to account for factors such as preparedness.
While we can never know when the next incident may occur, analysing your CRE portfolio in view of the factors outlined in this report and taking steps to address any shortcomings will help minimise the worst outcomes.