GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE M. Leanne Lachman Lachman Associates May 5, 2010
Takeaways Greatest urban population growth in 3 largest countries: China, India, U.S. In U.S., Gen Y outnumbers Baby Boomers Fastest growing regions: Africa, Middle East, Southeast, Asia, South Central Asia (the globe’s future labor force) Europe: only region facing population decline Rapid expansion of moderate-income, middle-class, and affluent households throughout developing world Overwhelming demand for residential, retail, logistics, hospitality, infrastructure development Densification is key everywhere, including N. America
World Population Growth Billions of People Less Developed Regions More Developed Regions Source: United Nations Least Developed Countries 2009: 6.8 Billion
More Developed Countries MaleFemale Source: United Nations
Less Developed Countries Source: United Nations MaleFemale
Maturity & Youth Source: United Nations MaleFemale Less Developed Countries – 5.3 billionMore Developed Countries – 1.2 billion MaleFemale
Urban/Rural Mix Source: United Nations Billion
Working-Age Population Change Change Number (Mil) Percent Sub-Saharan Africa MENA Latin America and Caribbean Asia Oceania Northern America Europe World1, Source: United Nations
Employment by Sector Source: ILO Developed Economies
Employment by Sector Source: ILO Developed Economies Latin America & Caribbean Middle East Central & Southeast Europe North Africa World East Asia Southeast Asia & Pacific South Asia Sub-Saharan Africa
Northern America Source: United Nations Millions
Northern American Urbanization United States81.4%87.0%90.4% Canada Source: United Nations
Latin America & Caribbean Source: United Nations Millions
Urbanization in Latin America & Caribbean South America82.6%88.3%91.4% Central America Caribbean Source: United Nations
Asia Source: United Nations Billion
Asian Urbanization South Central31.2%43.0%57.2% East Southeast Total Region39.4%52.9%65.2% Source: United Nations
Europe Source: United Nations Million
Europe’s 10 Big Countries Loss Gain Source: United Nations
Selected European Fertility Rates NorthEast Ireland1.90Poland1.28 Norway1.90Russia1.31 Sweden1.85Ukraine1.25 SouthWest Greece1.40France1.98 Italy1.35Germany1.40 Spain1.37Netherlands1.73 Source: Population Reference Bureau
EU Real Estate Without growth, demand for replacement space only New buildings will be needed – modern design, preferable locations, emerging uses (e.g., logistics, senior housing) Demolition volumes must match construction volumes Otherwise: –Vacancy rises –Rents fall –Values decline
Middle East and Africa Source: United Nations Million Sub-Saharan Africa Middle East and North Africa
Middle Eastern/African Urbanization Western Asia65.5%72.5%79.3% Northern Africa MENA Total60.2%68.1%76.2% Sub-Saharan Africa35.9%48.2%60.5% Source: United Nations
MENA and Sub-Saharan Africa MENA Sub-Saharan AfricaWorld 2007 Population (mil) ,700 Annual Growth1.8%2.5%1.2% Growth in working-age population %91%30% Life expectancy (years) Fertility rate Primary school completion91%60%86% Secondary school enrollment, relevant ages 74%31%65% 2007 Per capita income, (PPP)$7,385$1,870$9,852 Source: World Bank, United Nations
Global Real Estate Implications Strong demand in the Americas Only replacement demand in Europe: exercise caution Increasingly global retail branding and chain store expansion: think emerging markets Urbanization (and urban movement) generate massive real estate needs Overwhelming moderate- and middle-income residential demand in emerging markets Global production, commodity trading, and distribution require sophisticated logistics Stimulus funds = infrastructure
Population Projections to 2030 Thousands Source: Census Bureau
Components of Population Change (millions) Births Minus Deaths Domestic Migration International MigrationTotal Northeast Midwest South West U.S.+14.1__
Households by Type: 2010 and 2020 Thousands Source: Harvard Joint Center for Housing Studies
Two Big Generations Gen YBoomers 2010 Size74.8 million74.6 million Birth Years Age Now Hispanic19%10% Black15%12% Asian6%5% Housing TenureRentersOwners Neighborhood Preference Urban/ Walkable Suburban/ Auto-Oriented
America’s Ethnic Mix Source: Pew Research Center
GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE M. Leanne Lachman Lachman Associates May 5, 2010