Property values will increasingly be driven by public transportation, rather than interest rates as more and more people jam themselves into the world’s cities, says Rob Speyer, CEO of US developer Tishman Speyer. Addressing the annual ULI Asia Pacific Summit held by the Urban Land Institute (ULI) in Shanghai, Speyer on Thursday praised Shanghai’s urban planners for tackling road traffic and emissions by building modern mass transit, an approach that he sees as inevitable for the world’s booming metropolises.
Speyer, whose company has five projects on the mainland, including two in Shanghai, commended local mayor Yang Xiong and party secretary Han Zheng for investing in buses and metro lines as a way to make the city more livable. The developer said that urban centres including Los Angeles and Rio de Janeiro are now looking to the mainland commercial hub for lessons on how to ease gridlock and to make the city a better place to live and work. “Shanghai is where (Los Angeles mayor Eric Garcetti) learned how to cut congestion and the air pollution that has been suffocating L.A. for decades,” according to Speyer.
The Shanghai metro, he noted, is already the world’s largest transit system with 617 kilometers of track, and by 2020 will grow to twice the size of the London Underground. In Los Angeles, mayor Garcetti is busy applying Shanghai’s example to the second-biggest city in the US, Speyer said, with the famously auto-centric metropolis planning to build an additional 51.5 kilometres of subway by 2024.
Speyer Sees Parallels Between Shanghai and LA Projects
Speyer took the reins as sole chief executive at Manhattan-based Tishman Speyer last year after sharing the title with his father, Jerry Speyer, for seven years. The developer’s five mainland projects cover 1.6 million square metres in Shanghai, Suzhou and Chengdu, according to its corporate website. In his talk, Speyer pointed out that the company’s two mixed-use projects under development in Shanghai – The Springs in Yangpu district and Crystal Plaza in Pudong district’s Qiantan area – benefit from their close proximity to Shanghai’s underground transport network.
Replacing traffic jams with passenger rail is not only a relief to many commuters, but also a boon to savvy developers that know how to capitalize on the improved connectivity. The successful opening of the Expo Line extension of the LA Metro has given a boost to Santa Monica, where Tishman Speyer bought a high-grade office building last year. “The train is carrying so many new passengers to Santa Monica that some property owners even started shuttles to take people to and from the station,” Speyer noted.
Vanke Deal With Shenzhen Metro Shows Importance of Transport
The intersection of property, transportation and urban planning also gives rise to new business possibilities, such as China Vanke’s $6.9 billion partnership with the Shenzhen metro system which was announced on Friday.
Speyer, whose company partnered with Vanke on the Lumina residential project in San Francisco, sees the landmark deal between the transport operator and the mainland’s largest developer by sales as proof of the growing importance of transportation to real estate. “Property and transportation will increasingly become a single deal, even a requirement,” said Speyer, suggesting the Shenzhen deal could be replicated in other cities worldwide as rapid urbanization creates a growing need for safe, reliable transportation access.
Under the terms of the deal, which was first proposed in March, Vanke acquires premium land above metro stations in the southern Chinese megacity, while Shenzhen Metro gains a more than 20 percent stake in Vanke. Shenzhen plans to build the longest subway system in the world, surpassing even Shanghai’s, in a city that is projected to see population growth of nearly 18 percent over the next decade and a half.