Through my attendance at MIT’s World Real Estate Forum, I was introduced to new research that is collected in the book entitled, Toward Urban Economic Vibrancy, Patterns and Practice in Asia’s New Cities, Edited by Siqi Zheng and Zhengzhen Tan. The several papers that make up the book include sections on finance, structure, Public Private Partnership, design, success measurements, industrial policy, location, and case studies.

My fascination with New Cities is that industrial and office park development are the foundation. More than 600 New Cities have been developed since 2020.  The economic vibrancy of every New City is closely related to the mix of industries the developer creates. The shopping mall is used as an example with anchor stores and line tenants. The developer will supply lead corporate users, or even entire industries, to locate their operations in the New City for substantial discounts. Suppliers and related vendors will follow but wind up paying market rates.

One of the largest New City developers, China Fortune Land Development (“CFLD”), has staked their business on assembling industry clusters in every one of their 20 and growing New Cities. Out of 25,000 employees in all phases of design, development and operation, an industrial research staff of 5,000 will research and locate the leading industries that form the nucleus of a cluster. In broad categories, the valuable industries are Producer Services, High-End Manufacturing, and High-End Services. CFLD is not only the real estate developer, but they are a primary impetus for Industrial Policy. “Over 3700 employees is in a corporate solicitation branch and is described as “global hunters of promising innovative sectors and matchmakers between firms and new cities.”* In Malaysia, Cyberjaya is a New City near Singapore. Tenants in Cyberjaya will often come from shared services and outsourcing either as split operations of major global corporations or complete 3rd party contractors.

Industry is the means to propel a New City. From an industrial development perspective, developers leverage industrial development into a New City filled with housing, commercial, and recreation. The development model has aspects of a corporate build-to-suit on very long-term leases and for several different corporations, state-owned enterprises, and institutions all at once. In addition, the government carries the land.

What can we learn about New City practice? For one thing, Occupiers are the key to anchor a New City. Many corporations have already been seeking new accommodations to fit their business into an Environmental, Social, and Governance (ESG) framework. Post Covid-19, many companies will want to protect their employees by providing fully integrated work, living, and recreational environments. Whether we are looking to create New Cities from scratch, taking over parts of existing cities, or holistically redeveloping older corporate campuses, industry will remain a cornerstone. Through corporate relationships and knowledge for real estate locations, the opportunity is not only to develop a new industrial building, but to build an entire city.

*Page 143, “Gu’an, Private Planning for Industrial Growth”, Angie Jo

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