As part of this year's panel: „New Spatial Equilibrium" on January 16, 2025 at The Swiss Property Fair in Zurich, Dr. Juerg Syz, Managing Partner at Asia Green Real Estate together with Dr. Stephan Kloess, Owner of KRE KloessRealEstate and Dr. Rainer Suter, Co-Head of Core Funds at AXA Investment Managers discussed how demographic trends, accelerating urbanization, and regional dynamics are reshaping the global real estate sector. The experts examined the challenges and opportunities in a rapidly changing global landscape where short-term market demands often conflict with long-term perspectives.
Real estate investments should be long-term oriented, as their illiquid nature limits short-term flexibility. Short-term developments often reflect pressures from reporting cycles or from political initiatives, unreasonably favoring tactical over strategic approaches when investing in real estate. While many geopolitical influences are short-term, investments must be based on long-term fundamentals. Demographic trends and economic growth remain the key drivers of real estate demand.
Urbanization remains one of the key trends, especially in Asia, which is home to two-thirds of the world's population and generates 38% of the global GDP. According to the data published by the UN, around 70% of the global population will live in cities by 2050. Southeast Asia, particularly cities like Jakarta, is experiencing significant demographic and economic growth. The capital of Indonesia, which may soon become the largest metropolis in the world, offers compelling opportunities for long-term investments. In Europe, urbanization also remains an important factor, with cities like London and Lisbon standing out. Lisbon, in particular, is rapidly emerging as a major hub for startups and technology companies.
The discussion also addressed regional differences in the global real estate markets. Asia is characterized by scale, Europe by regulation, and America by innovation. While cities like New York and Boston in the U.S. remain attractive due to their dynamic innovation, investments in Europe are primarily directed at cities that foster research centers, entrepreneurship, and economic freedom. The focus is less on which countries to invest in and more on where young talent and economic activity are concentrated as "it is the cities, not the countries, that drive growth."