Transcript
Speaker: This is HSBC Global Viewpoint, your window into the thinking, trends and issues shaping global banking and markets.
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Speaker: Thank you for listening.
Speaker: Welcome everybody to this HSBC Global Research LinkedIn Live.
Speaker: I'm Piers Butler, Head of Global Research Direct, connecting you to world-class research.
Speaker: Today's LinkedIn Live is on our key theme of future cities and the changing face of urbanization.
Speaker: To help me talk about this topic, I have two distinguished guests, James Pomeroy, our global economist, and Stephen Bramley-Jackson, our Head of Global Real Estate Research.
Speaker: This LinkedIn Live is about answering your questions on the topic, but just to sort of frame the discussion and to get the ball rolling, I'm gonna ask each of our guests a couple of questions, and I'm gonna start with James.
Speaker: So James, the obvious question here is, before the pandemic, urbanization was almost a one-way bet.
Speaker: Since the pandemic, how has your outlook changed?
Speaker: Well, in the emerging world, actually not much has changed at all.
Speaker: In most parts of the emerging markets, you have a lot of jobs that you can't work remotely in, be it in manufacturing, be it in retail, be it in agriculture.
Speaker: the sort of jobs that you can't work remotely in.
Speaker: And therefore really not too much has changed.
Speaker: And those cities in the emerging world are still where you'd want to be living if you want access to high speed internet or you want access to the best education or the best healthcare or all of these things that we've also learned to appreciate a lot over the course of the last year or so.
Speaker: In the developed world though, urbanisation trends may look a little different.
Speaker: We still expect people to want to live in urban areas, just maybe slightly different ones, and it could well be that it's the suburbs, the smaller towns and the cities that are the relative winners compared to those big cities because you can get a little bit more space, a little bit more property for your money, but also still have the option of being able to work remotely, being able to commute if you need to, but also having access to some amenities, be it restaurants, be it bars, be it cafes, that we all seem to enjoy.
Speaker: So you talked about emerging markets and clearly urbanization was a key growth driver.
Speaker: Have you changed your forecast since then on the back of perhaps less urbanization in emerging markets?
Speaker: Well, it might be that you see slightly less in the short term because some people have been deterred from cities, even despite them being sort of the economic powerhouses, because, of course, the risk of contracting the virus in urban areas is slightly higher than in rural areas.
Speaker: You've had a lot of people in a lot of emerging markets who have left big cities in the short term to return to rural areas because of jobs not being...
Speaker: available in the near term.
Speaker: But actually over the longer term, we still think cities are the big drivers of growth.
Speaker: You've still got in many parts of the emerging world, the share of people living in urban areas today is less than 50 percent.
Speaker: And that number is surely going to continue to increase.
Speaker: It just might be that whilst for now it's the big cities where there's still a lot of demand for housing, where people want to go and live, it could be some of the smaller cities across the emerging world where we see a slightly faster pace of population growth in the coming years.
Speaker: So very quickly before I move on to Stephen, I know that in the run up to this LinkedIn Live, you posted some polls in your LinkedIn feed.
Speaker: Can you just give us some quick highlights?
Speaker: Yeah, so we were asking people how many more people we, well, how many more people people think are going to live in cities in the course of the next 10 years.
Speaker: And the most popular answer was an extra 100 million.
Speaker: Well, it's actually close to an extra billion people.
Speaker: And that's because of that emerging market story where you've got a lot of people who don't live in urban areas today, particularly in Asia and in some parts of Africa too, where urbanization rates are likely to increase quickly.
Speaker: And we also asked how many people
Speaker: want to work from home at least one day a week.
Speaker: The most popular answer was correct.
Speaker: It was 82% of people want to work from home at least one day a week.
Speaker: And actually a lot of the surveys that we've looked at over the course of the last year suggest that most people want to work from home two or three days a week.
Speaker: And that seems a pretty sensible benchmark across most of the world.
Speaker: Well, that's a good subject to sort of shift across to Stephen because one of the questions we had was the sort of changing design of commercial and residential real estate and indeed the role that technology may well play in that.
Speaker: Particularly on residential, are builders designing Zoom rooms now?
Speaker: What's the outlook there?
Speaker: Thanks, Piers.
Speaker: Well, I don't think Zoom rooms, well, not in my house anyway, are getting put in by builders at the moment.
Speaker: I think clearly the home has become a much more important aspect of daily life now.
Speaker: And of course, as James has just said with the results and the survey, it's going to be an integral part of the workplace in future years.
Speaker: So what we are seeing in residential markets is that we are seeing a shift of people looking for larger accommodation.
Speaker: And we're even seeing cement shortages in certain countries, the UK being a very good example.
Speaker: And I think this is all to do with people extending their homes.
Speaker: So on the residential front, larger is better.
Speaker: And certainly a number of people are moving out of congested cities, hoping to make that remote sort of workplace situation work.
Speaker: And for the commercial office owners, yep, they're looking at more flexible space.
Speaker: People will not be probably in the office five days a week as they were.
Speaker: There'll be a number of days a week, and that flexible space demand has gone up as a result.
Speaker: So the other big question obviously is on all the spending around mass transit, the daily commute that all of us used to engage in.
Speaker: How is the spending on mass transit and indeed the design of mass transit going to be impacted by these post-pandemic urbanization trends?
Speaker: Yeah, a very good question.
Speaker: I think the thing with mass transit is it's not easy to suddenly start again or rip it up or make very material changes to existing infrastructure.
Speaker: I think the unwelcome challenge, unfortunately, for the operators of mass transit systems is simply the footfall has gone down.
Speaker: and unfortunately is going to remain depressed for some time yet to come.
Speaker: So that means fewer ticket sales.
Speaker: So we already had operators that were losing money.
Speaker: And now I think unfortunately they're presented with a situation where the ability to make money is even more remote.
Speaker: I think what might happen is they will have to flex their businesses for the short term, so maybe less frequency.
Speaker: Maybe there are less rolling stock on carriages and what have you that are serving cities.
Speaker: I think automation, that will probably get accelerated.
Speaker: I think you need to take the human element out of public transport as quickly as you can.
Speaker: And that's an upfront cost, but over the long term, that's probably a saving.
Speaker: So you can do things.
Speaker: You can tinker with the existing system.
Speaker: I don't think you can make big, big changes
Speaker: But it's going to cost.
Speaker: So that's the unfortunate bit.
Speaker: One question, James, which actually came out of one of your colleagues' recently published reports.
Speaker: This is our China economist, Chu Hongbin.
Speaker: I sort of read this amazing statistic that I think in urban areas, 75,
Speaker: there's a sort of 75% level of ownership of people's residences.
Speaker: I mean, I know the UK was a nation of house owners, but that's a tremendous sign.
Speaker: Do we see house ownership affected again post-pandemic?
Speaker: Is that likely to be something that continues?
Speaker: There's a few things that are happening at the moment, and you're right to flag the incredibly high home ownership rates in China.
Speaker: They're the highest in the world.
Speaker: You have sort of across the rest of the world, you've still got
Speaker: quite varying degrees of home ownership.
Speaker: And a lot of that comes down to the amount of housing supply, household incomes, interest rates, all of those things.
Speaker: So there's a lot of factors that go into this.
Speaker: But what we're thinking post-pandemic, and we're seeing this already, and Steve's just nodded to this as well, is people want space.
Speaker: And you're seeing people who want to own homes, owning different homes.
Speaker: They're moving out of these bigger cities and they're moving to places to get slightly more space, a home office, to have a garden, all these things.
Speaker: and that we've all appreciated over the course of the last year or so.
Speaker: And whereas what you're seeing on the other side of that is in big cities, apartments and rental demand is down a little bit, and rental prices we're seeing where we have data are dropping quite quickly in big cities.
Speaker: Now that could mean that further down the line, you could see that a lot of younger people who historically haven't been able to afford
Speaker: living in the centre of London or Manhattan, certainly can.
Speaker: And you could see that suddenly renting becomes a little bit more attractive relative to home ownership because the house prices are going up so much in these areas where people want to buy them, but rental costs are falling in these big cities.
Speaker: And we could see a dynamic going forwards where a lot of young people is much more affordable for them to rent than it ever has been, but actually also the cost of buying a house is now completely unachievable.
Speaker: We're still waiting for your questions, so please do keep them coming through.
Speaker: They come through by email, but we'll take them.
Speaker: And somebody wants to dig down a little bit more into this question on infrastructure.
Speaker: And I guess this idea that perhaps, like everything in markets, there may be an overreaction.
Speaker: Do we face this risk that there is a cutback in infrastructure in mass transit, and that in reality this urbanization trend is so powerful that perhaps a year after the pandemic and when we've kind of forgotten the worst of it, this urbanization trend sort of picks up again and maybe we've made a mistake by under-investing in it?
Speaker: Stephen, why don't you kick off?
Speaker: Yeah, I think that's an interesting question and possible.
Speaker: I mean, I think with the large-scale infrastructure projects, and bearing in mind most of them are,
Speaker: are usually work in progress.
Speaker: It's quite difficult to decelerate the process and take money out of the scheme.
Speaker: I think once they're underway, they've got set delivery dates, which they usually overrun both in time and in cost.
Speaker: It's quite difficult to make forms of U-turn and not do that.
Speaker: Future projects, yeah, I suppose there could be a risk.
Speaker: I mean, not just because of the infrastructure per se, whether or not it is needed or whether it's needed to the size of the scheme that has been envisaged, but simply funding.
Speaker: Funding is probably going to have to wash around into other areas of the economy and cities included.
Speaker: So perhaps it gets reallocated.
Speaker: Maybe that's why some of the infrastructure projects that were slated to go ahead, some of them get delayed.
Speaker: Really, they get delayed because the funding's not in place.
Speaker: But certainly, yeah, I mean, my feeling is that as we go through the timeline, James said, you know, two or three days a week with the survey results from a lot of people, I think 82% said one day a week working from home.
Speaker: My feeling is that as we move along this timeline, people will be in offices more, not less.
Speaker: And therefore, the infrastructure is going to be just as important, perhaps more important.
Speaker: And sticking with you, Stephen, where have you seen geographically on a global scale the sort of biggest impact in terms of commercial and residential property values?
Speaker: Has there been any particular area of the world that has really stood out?
Speaker: Well, I think, funny enough, you know, if I look at trends, I mean, globally, we're, you know, we're pretty efficient now at sort of commuting trends around the globe.
Speaker: And actually, many cities and the housing markets are pretty much in tune and in step with one another.
Speaker: So I mean, I'm based and live now in the Middle East.
Speaker: I've lived here for a little over three years.
Speaker: Interestingly, as James talks about, you know, rents have declined quite significantly and property prices similarly.
Speaker: And we've seen that in developed markets.
Speaker: We've seen it in many markets.
Speaker: 2014 was really sort of a peak year for residential pricing.
Speaker: And in most markets, pricing has unwound since then.
Speaker: But if you look at the trends in the last six to nine months, really since the height of the first lockdowns,
Speaker: This gravitational pull towards larger buildings, be they townhouses or out of town property or villas, anything really that is not an apartment, you've seen prices rise and rise quite steeply.
Speaker: And that tells you all about the behavior of the owners or the purchasers.
Speaker: So I'm not so sure that I can point my finger to a particular market that has behaved
Speaker: anonymously to the others, I think actually they're pretty much in step, pretty much in tune with each other, certainly over the last six to nine months.
Speaker: Now, this LinkedIn is about future cities, but actually I think there is a strong overlap with another one of our big themes, which is demographics.
Speaker: And James, you've written quite a lot on demographics.
Speaker: Perhaps give us a sense of how the two kind of interlink.
Speaker: I mean, there's a lot of countries, this declining population.
Speaker: How does that affect the trend towards urbanization?
Speaker: There's a few things at play here.
Speaker: One is that if you think about your life cycle as a person, when are you more likely to move to a city?
Speaker: And there's sort of a lot of evidence in the data of people who move to cities when they're in their 20s, usually when they graduate from university or they leave school, you sort of move for your first job, you're much more likely to move to a city.
Speaker: So if you've got a large share of the population in your early 20s or teenage years, in the common years, you would expect to have urbanization rates rising.
Speaker: Whereas if you've got older populations like you've got in much of the developed world, the opposite happens and people often move out of big cities when they are getting closer to retirement age because the appeal of being close to nightclubs and late night activities probably diminishes a little bit beyond a certain age.
Speaker: So what you start to see is this sort of, you start to see that urbanization trends can go into reverse a little bit because of those
Speaker: demographic trends there.
Speaker: So there's a couple of things at play there.
Speaker: Is that population skew?
Speaker: I'm going to help to pull the urbanization rates in different directions.
Speaker: Now, Steve, we have a question for you on micro apartments.
Speaker: Those are being hiked with the solution to the lack of city housing.
Speaker: Are those micro apartments no longer viable?
Speaker: Maybe somebody's just bought one and is a bit worried.
Speaker: Well, I don't I expect the queue of buyers for micro apartments has shrunk quite a bit.
Speaker: Unfortunately, probably won't grow anytime soon either.
Speaker: It's all about timing, isn't it really an investment?
Speaker: Listen, I think the apartment market isn't dead and it's not defunct.
Speaker: I mean, at one point, you go about nine, 12 months ago, people thought the office market was obsolete.
Speaker: And at the moment the apartment space isn't really performing, but it's performing a function and it will particularly perform a function for younger people that are really still in the process of their career where they're getting their deposits together, getting their career organized, but need accommodation.
Speaker: You know, and as James is talking about, cities have just the same amount of appeal now as they always did.
Speaker: There's a bit more concern around social distancing,
Speaker: and density, housing density perhaps, but the appeal is still there.
Speaker: So micro apartments will make a comeback, but I think the apartment space is very interesting, probably for two reasons.
Speaker: One is it has over the years become increasingly professionally managed.
Speaker: So you've got the private rented sector, and that's seen boom investment actually over the last five, six, seven years, probably a decade actually.
Speaker: And I think that's going to have a much larger part to play.
Speaker: And if you think about the fact that
Speaker: people want flexible workspace now, they want flexible work arrangements, they want flexible balances between life and work, then, you know, they'll want to be renting
Speaker: to a degree, not always owning because that's quite an anchor.
Speaker: So I think the rental apartment market has a big place to play in the future.
Speaker: Maybe it's just not micro apartments just yet.
Speaker: Questions come in on, here we go.
Speaker: There's been a lot of focus on the 15-minute town and proximity of work, home and leisure immunities.
Speaker: We have also seen the City of London acknowledge the need to change.
Speaker: What are the speaker's expectations of this potential development?
Speaker: James, you want to have a go at that first?
Speaker: Yeah, I can start.
Speaker: It's definitely something we're going to see much, much more of.
Speaker: And I think partly, again, something that's been accelerated by the pandemic is people realizing how nice it is to have a lot of local amenities on your doorstep.
Speaker: How great is it if you can walk to some green space or to access to good shops or to leisure activities or all of those things is extremely, extremely sort of beneficial to everyone.
Speaker: And that's what people want to happen.
Speaker: But it's also really, really good news in terms of
Speaker: a lot of the environmental concerns that surround urbanization.
Speaker: If you can make it so that a lot of activities in urban areas can be done by foot or can be done by bike or all of those things, well actually you can go a long, long way to cutting the emissions that come out of cities, you can cut pollution, you can cut congestion.
Speaker: These are things that people really don't like.
Speaker: So I think there's a lot of pros to this side of things of making cities much more accessible to
Speaker: human power transport essentially.
Speaker: And if you can take that out of the equation, it should make them much more livable, much more appealing and cities that work in a much, much more efficient way.
Speaker: And Stephen, a question here on what are the examples of cities to copy as best in class?
Speaker: Where have you seen the best examples of future cities?
Speaker: Well, it's quite a popular sort of list, actually.
Speaker: I think, you know, when you do searches on things like this, it's usually the same cities, the same sort of culprits that come up.
Speaker: Usually very high up the list would be Singapore.
Speaker: I mean, the challenges that a city such as Singapore face, you know, it's probably the second, I think it's the second most densely populated city on the planet.
Speaker: We've talked about the importance of technology and the importance of connectivity within cities.
Speaker: So in Singapore, for example, 95 percent of households are connected to broadband.
Speaker: Now, this is a city where the functionality relies very heavily on technology.
Speaker: So I think that would be a very good example of a
Speaker: you know, a city that technology is connected and functioning.
Speaker: I mean, even the engineers now in Singapore are doing studies on light penetration to locate buildings and to design what type of building to put in various types and places within the city.
Speaker: So that's a good example.
Speaker: I have to, of course, say Dubai, which is where I'm currently living.
Speaker: Dubai comes, you know, very high up
Speaker: on the list.
Speaker: I think a great initiative here, it's called the seven year plan.
Speaker: I think the Dubai 2021 plan is to digitalize all of the government services.
Speaker: So again, you know, it all requires intellectual smart solutions using the Internet.
Speaker: But the Dubai authorities, when they've completed this plan and they're about midway through it, I think at the moment, they expect to save something like about 250 million US dollars.
Speaker: So again,
Speaker: It's technology, it's urban design, which is also in what is effectively a very young city in Dubai.
Speaker: I think that's a very good example as well.
Speaker: And then in the list, you've got Oslo, London's even in there.
Speaker: London's got a 5G network.
Speaker: Again, it's very much technology dependent, which is trying to roll out across cities.
Speaker: mentioned Oslo.
Speaker: I mean, the Netherlands is wonderful as well.
Speaker: You know, you look at what they're doing in Amsterdam.
Speaker: I mean, it's a wondrous sight.
Speaker: I think, you know, Rush Hour or the school run Amsterdam with the cycle lanes, the way they've managed to use that as part of the city infrastructure.
Speaker: I mean, I think that's a glowing example of, you know, environmental awareness and getting congestion and traffic off roads.
Speaker: That's just to name a few.
Speaker: Thank you.
Speaker: James, a question for you.
Speaker: A couple of years ago, there was talk about car sharing, electric cars being the future in town planning.
Speaker: Is that still the case?
Speaker: Yeah, it certainly will be.
Speaker: And one of the things we've highlighted in our research is that urban congestion is going to be an enormous problem in the coming years.
Speaker: So you have sort of two problems with people using a lot of cars in cities.
Speaker: One is the congestion problem and one is the pollution problem.
Speaker: And I think that pollution problem you can solve pretty easily with electric vehicles.
Speaker: So quite clearly, there's a huge incentive for urban areas to incentivize you to not have petrol or diesel cars and to go to electric.
Speaker: That's pretty clear.
Speaker: And that's a trend that's not going to change anytime soon.
Speaker: But then electric cars still cause congestion.
Speaker: And I think that's part of the equation that's often forgotten.
Speaker: Yes, they don't pollute, but they still mean you waste time stuck in traffic.
Speaker: So what we think you could end up seeing is a lot more of the sort of
Speaker: stick approaches from cities i.e to heavily discourage people from owning or using private vehicles in the future and so what we've seen across some parts of the world is some interesting case studies amsterdam for example steve just mentioned a great story in terms of cycle lanes one of the ways you can make that happen is you just take out car parking spaces so you actually just make it so you can't park in certain parts of the city and therefore suddenly it becomes really unappealing to drive around because there's nowhere to park
Speaker: actually quite a clever idea when you think about it in terms of nudging people's behavior.
Speaker: You've seen some more extreme examples.
Speaker: There was one in New York last year which closed down certain roads to private cars.
Speaker: In Stockholm, for example, the government basically worked out a lot of through roads that people were using to drive and just closed them and pedestrianize them.
Speaker: And all these things are heavily designed at really discouraging people from using private vehicles.
Speaker: And that really nudges you, therefore, towards sharing and to try and make the most
Speaker: of these vehicles and car sharing schemes and stuff will probably make up a much, much bigger part of urban transportation in the future.
Speaker: It's just maybe part of the solution that's probably been held back a little bit by a pandemic where people want to share things as little as possible.
Speaker: But going forwards, we still think it's going to be a big part of making cities much more circular and building out the sharing economy as well.
Speaker: Now is one of the trends, particularly with greater internet connectivity, against urbanization, this point that one of your colleagues, our business services analyst Matt Lloyd has written regarding distributed working and the fact that, you know, initially when you say you were an employer in a city and you drew a circle of the universe of people that you could recruit from, was basically commuting distance.
Speaker: And now with the pandemic, everybody's realized that actually you can work from home and suddenly the universe of people that you can recruit from has gone from, you know, say the city of London to Serbiton to all the way to Edinburgh or whatever.
Speaker: You know, suddenly your pool of addressable workers for a particular world is much larger.
Speaker: Isn't that going to have an impact on urbanization?
Speaker: I can just quickly fill in quickly from an economist perspective.
Speaker: I think it will be really interesting because people still have to live somewhere.
Speaker: And I think that's the part that's often forgotten in the discussion around remote working is yes, you've got to, you're not tied geographically to be so close necessarily to the centre of London, but I still need to live somewhere.
Speaker: And a lot of younger people or a lot of people in general based on the surveys do want to live in some form of urban area.
Speaker: It's just more likely to be a town or a smaller city.
Speaker: more affordable city and more however.
Speaker: There's also an interesting wage growth story here.
Speaker: So if you are a very geographically mobile worker who's highly skilled, I now theoretically, if I class myself as high skilled,
Speaker: don't need to work for a company that's based in the centre of London, I could choose to work for someone anywhere in the world.
Speaker: So my job opportunities have opened up and therefore theoretically my wage bargaining power has opened up as well.
Speaker: But if I was a low skilled worker or lower skilled worker, which again, I'm not saying which side of this equation I fit, we could, well you at least could argue that then HSBC could employ someone to do my job who is also based
Speaker: elsewhere.
Speaker: So you end up getting this interesting wage growth dynamic in the professional services sector where you could see some people with much, much greater wage bargaining power because of that flexibility, but some people with much lower wage bargaining power because of that flexibility, and it's very much going to be a case-by-case basis.
Speaker: Stephen, I have got one for you here.
Speaker: Do you see drone technology playing a role in urban transportation in the future?
Speaker: Do I see what technology?
Speaker: Drone technology.
Speaker: Do you see yourself being taken to work and working with drones?
Speaker: Well, I don't see me, actually.
Speaker: I hope I'm not around when drones are taking people to work.
Speaker: I'm going to guess that I won't be.
Speaker: However, it's interesting, isn't it?
Speaker: Because giving an example here in the Far East, I guess, some people that have dialed in will have heard of Neon, which is this future city that
Speaker: Very ambitious, very expensive future city being built in the Middle East.
Speaker: And if you look at the advertising material and what they're presenting and what some of the aspirations and ambitions are for that city, there are a lot of drones in the presentation material.
Speaker: I haven't seen them carrying any body yet, but there do seem to be some sketches of these like sort of hovercraft type cars that are moving people around as well.
Speaker: I think really rather than it being true to fact, I think it's really saying that, you know, if you've got the ambition, if you've got the aspiration, these things are feasible in future cities in future years.
Speaker: So there will perhaps be some of the younger listeners that may end up going to work in a drone, but I don't think I will be.
Speaker: Keeping with this sort of slightly sci-fi vision of the future, what about all these articles that have been written on vertical gardens and indeed vertical farms as a way of greening the city?
Speaker: Yeah, well, it's all about land usage, isn't it, and land constraint.
Speaker: So, you know, simply things go vertical because you just don't have the availability of footprint.
Speaker: to go lateral.
Speaker: So yeah, and they're already underway.
Speaker: Their example again in the Middle East again is at the forefront of much of this development, I think.
Speaker: So it has to happen.
Speaker: I think we're talking about population growth.
Speaker: James earlier with the survey, was it 100 billion?
Speaker: 100 billion people moving into cities, wasn't it?
Speaker: I think, is that the figure, James?
Speaker: A billion.
Speaker: Sorry, a billion, a billion, a million was the answer.
Speaker: A billion people moving into cities, you know, over future years.
Speaker: So, you know, if that's the population growth or the extent of population growth, then you've got to, there's any one way you can go.
Speaker: So I do think from a density perspective, things are going to be driven vertically and they already are being.
Speaker: Thank you.
Speaker: Question for James from LinkedIn.
Speaker: Is the limited car parking space arguably less effective to reduce the number of cars than expensive car license fees?
Speaker: Possibly, yes.
Speaker: But it really depends on how blunt a stick you want to use with your policy.
Speaker: And I think what you're going to see with a lot of these environmental issues is governments use almost nudge type policies where you sort of make it slightly less convenient and that sort of forces change sort of more habitually.
Speaker: rather than basically just making costs more expensive.
Speaker: People sort of backlash to things such as congestion charges or to things such as car license fees, all of these things are sort of, you know, pretty politically charged things.
Speaker: Whereas if you simply take a few car parking spaces out and widen the pavement,
Speaker: It's very, very hard to get too angry about that.
Speaker: So I think there's a sort of a nudge element to it.
Speaker: There's a political element to it.
Speaker: And I think some of these sort of softer policies could be really, really effective in changing people's habits around driving.
Speaker: Sort of foreign direct investment question sort of in terms of do we see foreign direct investment, FDI, as it's referred to, being impacted by changes in urbanization trends?
Speaker: James, perhaps one for you.
Speaker: Yeah, possibly.
Speaker: I mean, it's one of those things where what you've typically seen is foreign direct investment going into places to set up new businesses or expansion or all of those different things that have been heavily driven by this sort of concentration.
Speaker: FDI goes into big cities, businesses setting up and so on.
Speaker: And some of that could change because maybe you don't need to cross that border so much in terms of physical investment.
Speaker: So it could theoretically weigh on it a little bit.
Speaker: What we do expect to see is a lot more sort of
Speaker: softer investment in urban areas.
Speaker: It's going to be that it's got a lot of the technology side of things that we've discussed on this call.
Speaker: Some of the things that are still going to be a need to build a lot of infrastructure in a slightly different way.
Speaker: There's still going to be demand for some public transportation.
Speaker: There's still going to be demand for a lot of these things, whether that's local investment, domestic investment or foreign direct investment.
Speaker: remains to be seen but I think there is still demand for urban investment it just may take a slightly different shape than we did previously and how that plays out in terms of where that money comes from is still a little bit of a mystery.
Speaker: Right we're nearly up to time so I'm going to put you on the spot both of you.
Speaker: I want your quick conclusion on urbanization post pandemic.
Speaker: Does it continue apace or does it reverse?
Speaker: James.
Speaker: It continues a pace in the emerging markets and it stays pretty steady in the developed markets with people living in different places.
Speaker: Yeah, I think it continues a pace.
Speaker: It's just going to sort of morph a little bit, I think, just change its characteristics a little bit just to suit a post-pandemic world where we've already seen a shift in demand.
Speaker: But yes, definitely upwards.
Speaker: James and Stephen, thank you very much for your thoughts.
Speaker: Everyone, thank you for participating.
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