Global Demographics 2008: Shaping Real Estate's Future Reports Aging, Urbanization...

Global Demographics 2008: Shaping Real Estate's Future Reports Aging, Urbanization and Migration Set to Dramatically Affect Real Estate

NEW YORK--(Business Wire)--
With demographic trends driving real estate strategy, the real
estate industry faces opportunities and challenges as a result of an
aging global population, rapid urbanization and new migration
patterns, according to Global Demographics 2008: Shaping Real Estate's
Future, a new publication released today by the Urban Land Institute.

Sponsored in part by Deloitte LLP, the report provides insight
about the effect of global demographic change on real estate through a
review of critical issues, an examination of core fundamentals and an
analysis of underlying factors. Global Demographics 2008: Shaping Real
Estate's Future was authored by M. Leanne Lachman, president, Lachman
Associates, LLC in New York City and Deborah L. Brett of Deborah L.
Brett & Associates in Plainsboro, N. J.

"Over the next 20 years, demographic megatrends -- and their
variations by continent -- present the real estate industry with
tremendous opportunity to not only grow, but to better serve the
people real estate is designed for," said David Jacobstein, senior
advisor to Deloitte's Real Estate practice. "Mature economies --
especially growing ones -- offer attractive investment opportunities,
but emerging markets require vast quantities of infrastructure, as
well as residential, retail, office, and hotel properties to support
their burgeoning populations."

"Working with demographics, rather than against them, reduces
development risk and is likely to enhance returns," said M. Leanne
Lachman, president, Lachman Associates and the report's author.
"Therefore, the report's emphasis on real estate demand has broad
applicability for both investors and developers."

Findings from the report include:

Aging

The aging of the world's population is arguably the single most
dramatic demographic trend today, with three key trends emerging:

-- In 2006, almost 500 million people worldwide were 65 and
older.

-- By 2030, individuals 65 and older are projected to increase to
1 billion -- equaling one out of every eight of the earth's
inhabitants.

-- The most rapid increases in the 65-and-older population are
occurring in developing countries, which will see a jump of
140 percent by 2030.

Real estate implications:

-- Retirement housing is the primary real estate beneficiary of
global aging, with the U.S. senior housing industry set to
benefit from the opportunity to produce new products.

-- Rapid consolidation of senior housing operators will result in
more professional and cost-effective management.

-- Investor interest will continue to grow because economic
cycles have little effect on dementia and nursing care
facilities.

-- There is increased demand for affordable senior housing and
senior housing options in ethnic communities.

Urbanization

As of 2007, 3.3 billion people -- half of the world's population
-- live in urban areas. With that number expected to increase to 60
percent by 2030, five key trends are emerging:

-- One billion people live in slums, with 90 percent of this
population occurring in developing countries.

-- At least 133 million city dwellers in the developing world
lack durable housing.

-- Twenty percent of urban dwellers in emerging nations are
overcrowded, with more than three people per bedroom.

-- Only two-thirds of the world's urban population has access to
tap water, with only 46 percent having access in their homes.

-- More than 25 percent of the world's urban population lacks
adequate sanitation.

Real estate implications of these urbanization trends include:

-- Investing in infrastructure -- whether new or established --
is essential to the viability of long-term commercial real
estate projects.

-- Privatization of infrastructure through public/private
partnerships with investment funds are becoming increasingly
important, with notable examples occurring in the United
States, Spain and France.

-- Better land use controls should be implemented to prevent
high-density, informal communities from developing and reduce
outward urban sprawl because both trends present difficulties
to residents in terms of infrastructure, safety and lifestyle.

-- There is increased demand for housing and retail as a result
of a growing workforce.

-- In stagnant or shrinking populations, new construction must be
viewed as replacement properties -- even if that entails older
building demolition to maintain vacancy rates -- as has
occurred in continental Europe.

-- Emerging markets can leap from traditional, organic models to
contemporary multi-use projects and residential communities if
ground level infrastructure is established.

-- The lack of mortgage availability in the emerging market is
the greatest limitation on new development.

Migration

Over the last 45 years, global migration grew by more than 150
percent to 200 million, with three key trends emerging:

-- Migration has shifted from the traditional south to north
pattern to a flow between developing countries.

-- International migration has diversified beyond male laborers
to include qualified professionals, students and female
workers.

-- Increasingly, migrants gravitate towards large, urban areas.

Real estate implications of these migratory trends include:

-- Expatriate professionals demand international-quality real
estate, especially in the emerging markets.

-- Migrants at all economic levels generate housing and retail
demands.

-- Foreign nationals provide a mobile group of accomplished
construction project managers, who move from market to market
to develop both infrastructure and commercial real estate.

-- The estimated $318 billion in global remittances from
immigrants to their families support residential and retail
developments in their countries of origin.

-- Immigrants provide a strong construction labor market.

M. Leanne Lachman is president of Lachman Associates, an
independent real estate consulting firm serving private and
institutional investors. She is also an executive-in-residence at
Columbia University's Graduate Business School and serves on the
boards of Liberty Property Trust and Lincoln National Corporation. In
addition to portfolio management, Lachman's research interests range
from low- and moderate-income housing policy and the importance of the
underground economy to long-term demographic patterns and urban
redevelopment. Her most recent paper, "The New Exports: Office Jobs,"
was jointly published by Columbia Business School's Paul Milstein
Center for Real Estate and the Urban Land Institute. Lachman is widely
published and is a frequent speaker.

The ULI-Deloitte Global Demographics 2008-Shaping Real Estate's
Future report is the first in an annual series.

To interview Deloitte's David Jacobstein, contact Elizabeth
Fogerty at 212-436-7179 or efogerty@deloitte.com. To interview Leanne
Lachman, contact Marge Fahey at 202-624-7187 or mfahey@uli.org.

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and its
subsidiaries. Please see www.deloitte.com/us/about for a detailed
description of the legal structure of Deloitte LLP and its
subsidiaries.

About Urban Land Institute

The Urban Land Institute (www.uli.org) is a nonprofit education
and research institute supported by its members. Its mission is to
provide leadership in the responsible use of land and in creating and
sustaining thriving communities worldwide. Established in 1936, the
Institute has more than 40,000 members representing all aspects of the
land use and development disciplines.

Deloitte
Elizabeth Fogerty, +1-212-436-7179
Public Relations
efogerty@deloitte.com
or
Hill & Knowlton
Jessica Anderson, +1-212-885-0492
jessica.anderson@hillandknowlton.com

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