Transcript Slide 1

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
10
2009: 6.8 Billion
Least Developed
Countries
8
6
Less Developed Regions
4
2
More Developed Regions
Source: United Nations
2050
2045
2040
2035
2030
2025
2020
2015
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
0
More Developed Countries - 2005
Male
Female
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
5
6% 5% 4% 3% 2% 1% 0%
Source: United Nations
0% 1% 2% 3% 4% 5% 6%
Less Developed Countries - 2005
Male
Female
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
5
6% 5% 4% 3% 2% 1% 0%
Source: United Nations
0% 1% 2% 3% 4% 5% 6%
Maturity & Youth
More Developed Countries – 1.2 billion
Less Developed Countries – 5.3 billion
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
5
6% 5% 4% 3% 2% 1% 0%
Male
Source: United Nations
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
5
0% 1% 2% 3% 4% 5% 6%
Female
6% 5% 4% 3% 2% 1% 0%
Male
0% 1% 2% 3% 4% 5% 6%
Female
Urban/Rural Mix
Billion
7
6
5
4
3
2
1
Rural
Source: United Nations
Urban
20
50
20
40
20
30
20
20
20
10
20
00
19
90
19
80
19
70
19
60
19
50
0
Working-Age Population Change
2005-30 Change
Number (Mil)
Percent
Sub-Saharan Africa
372.7
90.6
MENA
119.7
52.2
Latin America and Caribbean
116.0
32.5
Asia
647.0
26.4
5.5
25.2
29.5
13.2
-52.8
-10.6
1,237.6
29.5
Oceania
Northern America
Europe
World
Source: United Nations
Employment by Sector - 2006
Developed Economies
0%
20%
40%
Agriculture
Source: ILO
60%
Services
80%
Industry
100%
Employment by Sector - 2006
Developed Economies
Latin America & Caribbean
Middle East
Central & Southeast Europe
North Africa
World
East Asia
Southeast Asia & Pacific
South Asia
Sub-Saharan Africa
0%
20%
40%
Agriculture
Source: ILO
60%
Services
80%
Industry
100%
Northern America
Millions
500
445.3
450
405.4
400
350
338.8
300
250
200
402.4
366.2
305.8
150
100
50
0
32.9
39.1
42.8
2007
2030
2050
Canada
Source: United Nations
U.S.
Northern American Urbanization
2007
2030
2050
United States
81.4%
87.0%
90.4%
Canada
80.3
84.0
87.9
Source: United Nations
Latin America & Caribbean
Millions
769.2
800
712.8
700
600
572.2
500
400
477.3
516.3
383.4
300
200
100
147.6
187.2
202.0
0
41.2
48.4
50.4
2007
2030
2050
Caribbean
Source: United Nations
Central America
South America
Urbanization in Latin America &
Caribbean
2007
2030
2050
South America
82.6%
88.3%
91.4%
Central America
70.8
77.7
83.3
Caribbean
65.4
75.5
82.6
Source: United Nations
Asia
Billion
4.9
5
4
3.8
0.7
0.8
0.6
East
Asia
South Central
Asia
4.6
3
2
Southeast
Asia
1
2.2
2.5
1.5
1.7
1.6
2007
2030
2050
1.7
0
Source: United Nations
Asian Urbanization
2007
2030
2050
South Central
31.2%
43.0%
57.2%
East
46.1
62.4
71.4
Southeast
45.8
61.8
73.3
Total Region
39.4%
52.9%
65.2%
Source: United Nations
Europe
Million
800
700
600
500
400
300
200
100
0
731.2
706.9
187.5
191.3
151.6
221.7
152.3
97.2
105.0
146.3
78.1
295.0
258.3
220.2
2007
2030
2050
East
Source: United Nations
666.3
North
South
West
Europe’s 10 Big Countries
Loss
Source: United Nations
Gain
Selected European
Fertility Rates - 2008
North
East
Ireland
1.90
Poland
1.28
Norway
1.90
Russia
1.31
Sweden
1.85
Ukraine
1.25
South
West
Greece
1.40
France
1.98
Italy
1.35
Germany
1.40
Spain
1.37
Netherlands
1.73
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
Million
2370.0
2,500
Middle East and
North Africa
2,000
1829.9
1,500
Sub-Saharan Africa
1760.7
1185.0
1,000
1308.5
807.4
500
0
Source: United Nations
377.6
521.4
609.2
2007
2030
2050
Middle Eastern/African Urbanization
2007
2030
2050
Western Asia
65.5%
72.5%
79.3%
Northern Africa
52.9
61.5
71.4
MENA Total
60.2%
68.1%
76.2%
Sub-Saharan Africa
35.9%
48.2%
60.5%
Source: United Nations
MENA and Sub-Saharan Africa
MENA
Sub-Saharan
Africa
World
338
807
6,700
Annual Growth
1.8%
2.5%
1.2%
Growth in working-age population
2005-2030
52%
91%
30%
Life expectancy (years)
70
50
68
Fertility rate
2.9
5.2
2.5
Primary school completion
91%
60%
86%
Secondary school enrollment,
relevant ages
74%
31%
65%
$7,385
$1,870
$9,852
2007 Population (mil)
2007 Per capita income, (PPP)
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
400,000
373,504
380,000
360,000
357,452
340,000
341,387
320,000
325,540
300,000
310,233
295,561
280,000
282,172
260,000
240,000
220,000
200,000
2000
Source: Census Bureau
2005
2010
2015
2020
2025
2030
Components of Population Change
2000-2008 (millions)
Births
Minus
Deaths
Domestic
Migration
International
Migration
Total
Northeast
+1.7
-2.4
+1.8
+1.3
Midwest
+2.7
-1.6
+1.1
+2.2
South
+5.1
+3.6
+2.6
+11.5
West
+4.6
+0.4
+2.7
+7.7
U.S.
+14.1
__
+8.1
+22.6
Households by Type: 2010 and 2020
Thousands
160,000
140,000
Single Persons
120,000
100,000
38,184
33,626
Other Non-Family
14,106
80,000
12,567
60,000
38,957
44,273
8,791
9,171
27,627
28,381
2010
2020
40,000
20,000
0
Source: Harvard Joint Center for Housing Studies
Married or Partnered, no
kids
Single Parents
Married or Partnered
w/kids
Two Big Generations
Gen Y
Boomers
2010 Size
74.8 million
74.6 million
Birth Years
1977-1994
1946-1964
Age Now
16-33
46-64
Hispanic
19%
10%
Black
15%
12%
Asian
6%
5%
Housing Tenure
Renters
Owners
Neighborhood
Preference
Urban/
Walkable
Suburban/
Auto-Oriented
America’s Ethnic Mix
100%
80%
0.6%
11%
3.4%
9%
5%
13%
14%
14%
60%
29%
40%
20%
0%
85%
68%
48%
1960
2005
2050
White
Source: Pew Research Center
Hispanic
Black
Asian
GLOBAL DEMOGRAPHICS:
SHAPING REAL ESTATE’S FUTURE
M. Leanne Lachman
Lachman Associates
May 5, 2010