global demographics: shaping real estate’s future

GLOBAL DEMOGRAPHICS:GLOBAL DEMOGRAPHICS:SHAPING REAL ESTATE’S FUTURESHAPING REAL ESTATE’S FUTURE

M. Leanne LachmanLachman 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

0

2

4

6

8

10

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Billions of People

Less Developed Regions

More Developed Regions

Source: United Nations

Least DevelopedCountries

2009: 6.8 Billion

More Developed Countries - 2005100+

95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-95

Male Female

0% 1% 2% 3% 4% 5% 6%


0%1%2%3%4%5%6%

Less Developed Countries - 2005


100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-95

Male Female

0% 1% 2% 3% 4% 5% 6%0%1%2%3%4%5%6%

Maturity & Youth


100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-95

Male Female0% 1% 2% 3% 4% 5% 6%0%1%2%3%4%5%6%

Less Developed Countries – 5.3 billionMore Developed Countries – 1.2 billion100+

95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-95

Male Female0% 1% 2% 3% 4% 5% 6%0%1%2%3%4%5%6%

Urban/Rural Mix

0

1

2

3

4

5

6

7

Rural Urban


Billion

Working-Age Population Change

2005-30 ChangeNumber (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

Oceania 5.5 25.2

Northern America 29.5 13.2

Europe -52.8 -10.6

World 1,237.6 29.5


Employment by Sector - 2006

0% 20% 40% 60% 80% 100%

Agriculture Services Industry

Source: ILO

Developed Economies

Employment by Sector - 2006

0% 20% 40% 60% 80% 100%

Agriculture Services Industry

Source: ILO

Developed Economies

Latin America & Caribbean

Middle East

Central & Southeast Europe

North Africa

WorldEast Asia

Southeast Asia & Pacific

South Asia

Sub-Saharan Africa

Northern America

32.9 39.1 42.8

305.8366.2

402.4

0

50

100

150

200

250

300

350

400

450

500

2007 2030 2050

Canada U.S.


Millions

338.8

405.4445.3

Northern American Urbanization

2007 2030 2050

United States 81.4% 87.0% 90.4%

Canada 80.3 84.0 87.9


Latin America & Caribbean

41.2 48.4 50.4147.6 187.2 202.0

383.4

477.3516.3

0

100

200

300

400

500

600

700

800

2007 2030 2050

Caribbean Central America South America


Millions

572.2

712.8769.2

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


Asia


EastAsia

Southeast Southeast AsiaAsia

South Central Asia

1.5 1.7 1.6

1.72.2 2.5

0.6

0.70.8

0

1

2

3

4

5

2007 2030 2050

Billion

3.8

4.64.9

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%


Europe

295.0 258.3 220.2

97.2 105.078.1

151.6 152.3146.3

187.5 191.3221.7

0100200300400500600700800

2007 2030 2050

East North South West


731.2 706.9 666.3

Million

Europe’s 10 Big Countries

Loss Gain


Selected EuropeanFertility Rates - 2008

North EastIreland 1.90 Poland 1.28

Norway 1.90 Russia 1.31

Sweden 1.85 Ukraine 1.25

South WestGreece 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


377.6 521.4 609.2

807.4

1308.5

1760.7

0

500

1,000

1,500

2,000

2,500

2007 2030 2050

Million

1185.0

1829.9

2370.0

Sub-Saharan Africa

Middle East andNorth Africa

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%


MENA and Sub-Saharan Africa

MENASub-Saharan

Africa World2007 Population (mil) 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%

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

373,504

357,452341,387

325,540310,233

295,561282,172

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

400,000

2000 2005 2010 2015 2020 2025 2030

Thousands

Source: Census Bureau

Components of Population Change2000-2008 (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

27,627 28,381

8,791 9,171

38,957 44,273

12,56714,106

33,62638,184

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2010 2020

Single Persons

Other Non-Family

Married or Partnered, nokidsSingle Parents

Married or Partneredw/kids

Thousands

Source: Harvard Joint Center for Housing Studies

Two Big GenerationsGen 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

NeighborhoodPreference

Urban/Walkable

Suburban/Auto-Oriented

America’s Ethnic Mix

85% 68% 48%

3.4%14%

29%

11%13% 14%

0.6% 5% 9%

0%

20%

40%

60%

80%

100%

1960 2005 2050White Hispanic Black Asian

Source: Pew Research Center

GLOBAL DEMOGRAPHICS:GLOBAL DEMOGRAPHICS:SHAPING REAL ESTATE’S FUTURESHAPING REAL ESTATE’S FUTURE

M. Leanne LachmanLachman Associates

May 5, 2010

global demographics: shaping real estate’s future

Documents

developed countries

developed regionsless

united nations2005

united nationsleast

united nations100

united nationsless

largest countries

south central asia