According to the 2020 Attractiveness of Global Business Districts Report, while Western cities still command the highest rankings, Asian business districts have become increasingly competitive with Tokyo ranking third, Beijing seventh, Seoul eighth and Singapore ninth…
According to the 2020 Attractiveness of Global Business Districts (GBD) Report, published by EY and the Urban Land Institute (ULI), and commissioned by the GBD Innovation Club, Singapore ranks ninth globally for its overall GBD attractiveness. Singapore follows closely behind Asian peers Tokyo in 3
rd position, Beijing in 7 th and Seoul 8th. Hong Kong ranked in 13th position, followed by Shanghai (18th) and Mumbai (21st).
London retained pole position, followed by New York’s Midtown (2nd), Tokyo’s Marunouchi (3rd) and Paris’ La Défense (4th). The EY/ULI 2020 Report, which is the most comprehensive international study that assesses and compares GBDs, confirms that business districts in Western Europe and North America continue to lead the way, amid fierce competition from Asian business districts. However, it warned that they will all need to adapt in response to the impact and future management of the Covid-19 crisis.
Singapore was recognised as number one for “quality of the urban environment” and was the only country in Asia to be ranked in the top 10 for this factor. Key acknowledgements included its massive commercial space supply, diversified offering of cultural and sporting facilities, as well as a high ranking in terms of quality of life.
In addition, Singapore also ranked second in the world for “bespoke and innovative real estate supply”, just behind Paris and ahead of key cities like London, Tokyo and New York.
Despite a sharp drop in future office space supply in Singapore, the country stands out in the global arena for its digital infrastructure, having invested heavily in innovation, as well as the connectivity of spaces. Singapore has pledged to equip at least half of the city state with 5G by 2022.
The report highlights how competition between business districts is intensifying with the range of the EY-ULI Index scores – a ranking established as part of a previous report – narrowing between the 21 GBDs since 2017. The largest increases in the EY-ULI Index between 2017 and 2020 were by Asian business districts, with Beijing’s Central Business District leading the charge.
According to ULI Europe CEO Lisette van Doorn, the report highlights how the ability to attract talent has become even more important when assessing the attractiveness of business districts in comparison to the 2017 edition.
“Key elements to attract talent include quality of life, health and wellbeing and the availability of a live/work/play environment. Post Covid-19, we expect these human elements to become even more important than they already are. Business districts will have to adjust to a ‘new normal’ and those that do most successfully are expected to rise up the rankings in the future. Here in Asia, the major business districts have benefited from an improvement in their ability to attract and retain talent. Beijing’s CBD also shows a great progression of its real estate performance, due to its growing stock of office spaces,” says van Doorn.
Asian business districts are gaining momentum and now competing globally.
The largest increases in the EY/ULI Index between 2017 and 2020 were experienced by Asian GBDs,
with Beijing leading, thanks to its increasing stock of office space (4.3 million square meters), which now hosts 8 Fortune Global 500 companies’ headquarters and 850,000 square meters of retail space.
Asian business districts also top the rankings for their overall business climate, with Tokyo and Seoul leading the chart. Tokyo continues to lead the world ranking of economic strength and ease of doing business, while Seoul stands out for the amount of money companies invest in R&D globally.
According to Ernst & Young Advisory France, Partner Marc Lhermitte says among the big questions
for business districts will be whether they are able to convince all their stakeholders that they are still special and unique places to operate.
“Before the outbreak of Covid-19, global business districts were in a high-stakes race to attract talent, new business and capital. For the most part, this will continue, albeit under new rules and those markets that can adapt to a post-pandemic world will be best-placed to succeed. In particular, business districts users will look for optimised, safer and more attractive workplaces,” says Lhermitte.
- The concentration of talent, unparalleled business efficiency, and instant connectivity are fundamental strengths of GBDs
- Prioritising the environment is an obligation to attract talent and tenants
- Changing working patterns and focus on wellbeing might put pressure on the economic outlook of GBDs
- Global risks facing cities and GBDs call for collective resilience strategies and collaboration between stakeholders;
- In the long term, GBDs must become inclusive urban destinations, beyond concentrations of office space.
The 2020 Attractiveness of Global Business Districts Report assessed 21 of the major GBDs and is based on complementary research approaches including quantitative – 46 objective indicators corresponding with 966 data points were used – and qualitative. A global survey of 349 real estate professionals, public officials, academics and users worldwide was carried out,as well as 22 detailed interviews with global experts from business districts.
It ranks each GBD based on five main criteria, including its ability to attract and retain talent; proximity to markets, customers, and partners; quality of the urban environment; local and global influence; and, adapted and innovative real estate supply.
Respondents to the survey, which was carried out before the Covid-19 crisis, said that prioritising the environment has become and will remain an obligation to attract talent and tenants with the top three priorities for making a business district sustainable including:
- sustainable and diversified transport
- more efficient energy and water use management; and,
- more trees/urban forestry and farming.
The report concludes that new global risks facing cities and GBDs call for immediate and collective resilience strategies and that, in the long term, GBDs must become inclusive urban destinations, not just concentrations of office space, in order to survive and adapt to the ‘new normal’.
Commenting on this, Chairwoman of Global Business Districts Innovation Club and CEO of Paris La Défense MarieCélie Guillaume says there is no doubt that GBDs will need to adapt to the ‘new normal’.
“The Covid-19 crisis has made clear that human beings need social interaction and thrive from it. We are confident that the core of a GBD’s attractiveness formula will remain the same. International businesses – which represent the vast majority of GBDs – will need to resume staff meetings, conduct strategic projects, host clients and business partners,” Guillaume.
(Ed. The full report is available here. The overall ranking for the EY-ULI Index is established based on the relative performance of each district based on 46 indicators separated into five criteria, Ability to attract and retain talent; Proximity to markets, customers, and partners; Quality of the urban environment; Local and global influence; and adapted and innovative real estate supply. Final ranking is obtained by calculating an average score for each business district, by applying a weighting to the score obtained in each attractiveness criterion.)