When PricewaterhouseCooper declared 2016 as the year of the ’18-hour city’ – secondary cities that are becoming more popular and vibrant, but without the 24-hour lifestyle written into the DNA of gateway cities like New York and San Francisco – it was met with optimism regarding the state of the US economy and the future flow of real estate capital from those that look to gain from exploring alternative markets. But for those who live in the cities named (Austin, Houston, Denver, San Diego, San Antonio, Charlotte, Nashville and more), it was hardly a surprise – mostly young, creative professionals in cities brimming with unique culture, it’s them and their habits that added the extra hours to the day, after all.
The ubiquitous millennial of course has a role to play in the advent of these cities in the States, or at least the very term millennial has infiltrated yet another industry. The average age of a first-time American homeowner is at an all-time high, as Generation Y put off big financial commitments for a number of reasons including a rise in freelance and self-employment/entrepreneurship culture and a socioeconomic shift delaying marriage and the starting of families. These generational changes, as well as a cultural shift seeing more and more young people shunning the mainstream have added to the popularity and vibrancy of secondary housing markets, while gentrification of big cities has contributed to their unaffordability and commercialization. However, it is the glamour, diversity and convenience of traditional 24-hour cities that have inspired 9-5 towns to function well into the night, as these young and culturally hungry populations contribute to a creation of a bustling downtown area where the lines of work, live and play get blurred and bars, restaurants, galleries and stores bring the city alive in the evening. It is here where economies are bolstered, where startups flourish and where artists flock, giving the real estate industry reason to whip out their cheque books as Colliers International Global Investors Outlook 2016 echoed PwC’s findings, identifying tier-two cities as the likely targets of those looking for rewarding investment opportunities.
If we take the approach used by real estate giants to identify trending cities, we’ll likely find that this isn’t an American phenomenon at all and that the opportunities for investment and development in 18-hour cities across the world are ripe for the picking. Unexplored, developing and recovering markets are mitigating their perceived risks with exciting potential rewards. Here we explore the emerging cities with 18-hour potential. :
With a whopping 7.6 million residents within its sub-provincial borders, one of China’s oldest cities has long experienced cosmopolitanism as a key port city since the days of the Silk Road. Today, with 3.5 million residing in its urban core, Ningbo is slowly but surely adopting the characteristics of its big brothers Beijing, Shanghai and Shenzen. With technological, industrial, economic and free zones established in the late 90s and a new highway halving travel times between Ningbo and other major Chinese cities in 2007, the area experienced a rapid surge in economic activity with the private sector contributing 80% of the city’s GDP. A vibrant student community, a multitude of international cuisines and liquors on offer right on the river and a growing creative industry primes Ningbo to be China’s next it city.
Shortlisted as one of India’s upcoming 100 Smart Cities, Indore seems poised to win as it’s already seen development successes including a well-received slum-development project, funded by the UK, and pioneering PPP infrastructure projects. An inaugural member of the Rockerfeller Foundations’ Asian Cities Climate Change Resilience Network and the only city in India to host both an Indian Institute of Management AND an Indian Institute of Technology, the 2 million strong city is already seeing over 5% quarter on quarter growth in real estate. IT giants TCS and Infosys have done much to bolster the economy, alongside a historical commercial sector and a more modern auto industry, each adding more allure and jobs every year. The second city to adopt free public wi-fi and having established an efficient bus rapid transit system in 2013, Indore is catering to a young, connected and energetic population, not least with the advent of hip rooftop bars.
Voted more liveable than Jakarta, Indonesia’s fifth largest city is experiencing growth and development at a rapid rate, with the service industry making up for around 70% of its economy. Though the general property market in Indonesia saw a downturn in 2015, Makassar managed to buck the trend, showing a 5% growth, while the Boston Consulting Group’s prediction that the Indonesian middle class will double by 2020 indicates that over 40% off these newly affluent citizens will be in the port city. Closing in on a population of 2 million, the city of Makassar recently signed and MOU with Microsoft to enhance the IT capacity of its citizens, while the city recently celebrated its ancient and modern culture with its very first art biennale, uniting its disparate yet committed creative communities underpinned by underground music festivals and intellectual coffee shops.
Already a tourist destination, Natal – which translates to nativity in English, and where the average temperature on Christmas day is a toasty 27 degrees Celsius – is no stranger to vibrancy and a bustling recreational scene. However, with Rio de Grande Norte – the region where Natal is located – the second largest oil producing state in Brazil, the resort city is also the administrative center for the oil industry with the Federal University of Rio De Grande acting as a national scientific research pole. GDP in Natal is growing at a rate 50% higher than the national average and with a bustling arts and culture scene, one of Brazil’s most efficient public transport systems and a fledgling tech start up industry starting to grow legs, the seaside city has plenty to offer both homebuyers and real estate giants.
Making headlines for all the right reasons, Colombia’s second largest city is often pointed to as a pioneer in urban planning and city innovation. With a focus on good public spaces, affordable and efficient public transport, functional design and architecture and an inclusive civil process, it’s no surprise the traditionally a textiles agriculture-export based economy has flourished into a more diversified one where the fashion retail, food and beverage and arts industries have made it far more creative-friendly. Latin America’s undisputed startup hub, Colombia’s young professionals are benefiting from a lower cost of living when compared to the capital, Bogota, while the world’s most notorious venture capitalists, especially in the tech, internet and media fields, are pouring investment into a city famous for its entrepreneurial spirit.
Despite being the capital city, Nassau makes this list given its small population and recent emergence as an arts and culture powerhouse in the sunny Caribbean. While it might be difficult to imagine much more going on in the slice of heaven than chilling by the beach, Nassau was recently appointed as a UNESCO Creative City for its prominence in crafts and folk art and creative entrepreneurship has been championed by several international organizations, tapping the overwhelmingly young population for talent and innovation. Though the island city still remains very much quiet after dark, a recent push for efficient urban development is seeing new proposals for adaptive reuse of old architecture to increase cultural vibrancy, while young professionals are seeking new career paths away from the traditional tourism industry. With one of the most competitive foreign investment environments in the world, it’s no surprise the startup trend is making its mark on the island and the real estate industry heats up.
Another capital, Abuja has long been in the shadows of Lagos with its relatively meagre 3 million population, however a slew of entrepreneurship and cultural initiatives are rooting for this anomaly of a second tier city to stand as a vibrant hub in its own right. With Nigeria home to Sub Saharan Africa’s biggest economy, diversification away from its traditional commodities-driven markets and into arts, culture and creative entrepreneurship is putting Abuja on the map for non-traditional revenue streams. With constant updates to its downtown infrastructure, the city has come alive with informal restaurants, bars and café, sprawling across sidewalks, home to the young population on evenings and weekends, while music and arts festivals populate the capital’s social calendar, keeping cementing Nigeria’s status as a stalwart of African culture.
Durban, South Africa
Dubbed the ‘coolest city in South Africa you’ve never seen’ by CNN, Durban has been slowly creeping onto the agendas of investors, real estate giants and cultural operators alike. The tourist town and its related suburbs are home to nearly 3 million, but its urban core, with a citizenship of around a tenth of the total, is where the hipsters and students hang, thanks to the seven universities in the metropolis. With instagrammable Art Deco architecture and a slew of galleries and playhouses, the creative economy is going strong, with festivals, collectives and hackathons popping up on every corner. Meanwhile, the luxury housing market has been named one to watch in global lists, as real estate industry leaders collectively point towards the opportunities, while global tech media giants are slowly but surely taking note of the vibrant startup scene.
When Egypt’s presidency announced an expansion of the historic and economically crucial Suez Canal, it was met with scepticism but within a single year they were able to achieve it. Now, the Suez Zone is the center of global attention as the country looks to pour in both public and foreign private funds into a city once known only known for its trade, infrastructure and fishing industries. Looking to create a high-tech ICT and telecommunications hub in the area, the sleepy seaside town looks to be revitalized with a new tech-heavy university, an ICT zone and software ‘park’ and a ‘Technology Valley’ which are all set to benefit from Egypt’s standing as the second largest host of submarine cables in the world, and it’s strong ICT offshoring and outsourcing industry. Meanwhile, the country’s new proposed administrative capital is slated to be positioned halfway between Cairo and Suez, further adding to the Suez’s 18-hour potential.