The Attractiveness of Global Business Districts report The Challenge to Remain Competitive May 2020 A report on the world's leading business districts, their performance, and transformation EY and Urban Land Institute (ULI) Attractiveness of Global Business Districts (GBD) report is the only international study that assesses and compares the world's leading business districts. It covers 21 business districts selected by EY and ULI teams, while ensuring each global economic region is represented. The 21 global business districts of the EY-ULI 2020 monitor London London Legend The City Canary Wharf 14.5 8.8 14.5 1.5 2019 data or most recent available 483 5-11 120 2-11 Population of Office space Toronto Amsterdam the metro area (in million 2.4 0.9 (in million) sq.m) 9.9 10.5 Financial District Zuidas 44 1-3 24.9 4.3 340 4-5 5.4 3.4 Frankfurt Number of 199 8-56 25.6 2.5 200 5-7 Bankenviertel 2.4 2.8 Employees Fortune 500 Chicago Paris Seoul in the business in the business Beijing Gangnam 117 3-12 San Francisco The Loop New York La Défense 4.8 1.1 229 1-1 CBD district district - in the Financial District Midtown 12.2 3.7 89 2-2 Dubai Tokyo (in ‘000) metropolitan Shanghai Marunouchi area 8.7 5.1 23.5 20.1 180 3-28 DIFC Pudong-Lujiazui 38.0 8.0 238 1-1 939 10-14 34.0 2.1 Hong Kong 230 18-51 Mumbai Central District New York Bandra Kurla Complex 98 2-7 Financial District 7.3 2.1 27.7 0.9 23.5 5.8 Singapore 172 5-7 269 4-14 41 0-4 Downtown Core 5.6 2.3 109 2-3 Sao Paulo Paulista Avenue Johannesburg Sandton 21.2 1.3 4.4 1.8 Sydney 63 1-3 86 0-0 CBD 5.0 5.0 234 2-2 The business districts have been Five observations based on Covid-19 and long term mega-trends : selected, compared, and ranked on 46 indicators taken at the level of the district, 1 The concentration of talent, 4 Global risks facing cities and GBDs call metropolitan area, or country. unparalleled business efficiency, and for collective resilience strategies and instant connectivity are fundamental collaboration between stakeholders Overall ranking 2020 strengths of GBDs In the long term, GBDs must become Ranking Business district 5 Prioritizing the environment is inclusive urban destinations, beyond 1 London, The City 2 an obligation to attract talent concentrations of office space 2 New York, Midtown and tenants 3 Tokyo, Marunouchi 4 Paris, La Défense 3 Changing working patterns and focus 5 London, Canary Wharf on wellbeing might put pressure on 6 New York, Financial District the economic outlook of GBDs 7 Beijing, CBD 2 The Attractiveness of Global Business Districts report - Executive summary Foreword In 2017, EY and ULI set a benchmark, analyzing the So far, nobody knows when the GBD workforce will be performance and the main trends that impact global able to return to their offices. Timing and conditions business districts (GBDs). This 2020 edition provides of a gradual return to ‘normal’ are still unknown. Marc Lhermitte updates and details the changes business districts What is more certain is that social and professional Partner, have made to remain competitive and become more distancing measures will carry on for months and new Ernst & Young Advisory attractive to clients, talent and businesses. sanitary precautions will continue for years. This edition comes amidst the COVID-19 global Post the COVID-19 crisis, GBDs will need to adapt pandemic which has, in just a few weeks, changed to the "new normal". Health and wellbeing will be the health and economic outlook of millions of paramount in offices and public spaces. This trend is people, directly or indirectly. It has also disrupted how already visible, but will impact real estate, owners and how we live, interact and work. operators more significantly. The pressure to reduce Lisette Van Doorn costs in the recovery phase, the rapid adoption of Chief Executive Officer, Before various governments-imposed lockdowns and technology, and working from home will also change ULI Europe social distancing measures, the 21 GBDs covered by this report were the main workplace for 4.5 the role and supply of real estate for companies. million people. Tens of millions more made them a While still too early to draw conclusions on potential destination to visit clients, shop or dine, go to the long-term impact of the crisis, it is becoming movies or watch their favorite team play, or simply clear that cities and districts more specifically walk the streets among towering, awe-inspiring, and will be impacted in various ways, for example iconic buildings. related to health, quality of life and safety. In areas In total, they cover nearly 100 million square meters characterized by high population density and high of office space. They host 79 global headquarters degrees of social interaction, the impact is likely is of Fortune Global 500 companies, as well as most likely to be more and long-lasting. The crisis has also of their professional services providers, such as made it clear that social interaction is a necessity for consulting and audit firms, insurers and bankers, human beings and that they need to cultivate it more. advertising agencies and media companies. Therefore, we are confident that the core of a Though they employ, on average, 4.5% of the GBD’s attractiveness formula will remain the same. active population of their metropolitan areas, International businesses which represent the they are some of the biggest players in global business. vast majority of GBDs will need to resume staff As of April 15, 14 of the 21 GBDs assessed were meetings, conduct strategic projects, host clients and in cities where full lockdowns have been enforced1, business partners. such as London, New York, and Paris. This has In this report, we first present the current competition resulted – in these 67% of GBDs that are home scenario among the 21 GBDs, how the landscape to more than 3.5 million workers – in half-empty has changed between 2017 and 2020, and what buildings, as employees are quarantined at home the starting point is for the global competition for public health and safety reasons. Business are going forward. having to adapt to the new conditions and provide The report will then focus on five observations, based continuity for employees and clients. Employees on a detailed analysis of interviews and an extensive are facing the need to reorganize their family and survey, long-term GBD trends we have seen since the professional life to continue to work and live under 2017 report and lessons learned from the first four these conditions. Furthermore, in the seven remaining months of 2020. GBDs, which employ about 21% of the 4.5 million people, restrictions are often enforced, disrupting free The third layer of the report provides a detailed movement and working life. trend analysis, this shows how each business district analyzed performs across five major Global business districts were increasingly competing attractiveness factors. to attract talent, new business, and capital before the COVID-19 crisis started. This competition will likely continue, although the rules may change. 1 Cities enforcing full lockdowns as of 15 April 2020: Chicago, Dubai, Johannesburg, London, Mumbai, New York, Paris, San Francisco, São Paulo, Singapore, Sydney, and Toronto. This introduction was written on 1 May 2020. The Attractiveness of Global Business Districts report - Executive summary 3 The starting point: The Attractiveness of Global Business Districts 2020 report confirms the leadership of Western global cities and the increasing competitiveness of Asian business districts The business districts of London, New York, the backdrop of uncertainty surrounding Brexit, the City’s EY-ULI Tokyo and Paris remain at the top Index stood at 58.9, compared with 61.5 in the first edition of the survey. Consequently, the City of London’s competitors • Despite political concerns, the City of London remains at the top have gained ground. It is too early to tell how the first tier will of the ranking (58.9 on the EY-ULI 2020 Index vs 61.5 in 2017). be affected by the COVID-19 pandemic, but it is obvious that, It leverages its high concentration of service, financial, and for each of them, there will be different evolutions depending on university activities. Canary Wharf, in fifth position, also benefits the duration of lockdowns and the general economic situation of from its improving urban environment: it has more residents countries and cities where they are located. (16,000 people live in the business district) and it has added new leisure facilities since 2017. Overall attractiveness ranking 2020 Ranking Business district EY-ULI Index • New York Midtown (57.5) and Tokyo Marunouchi (54.7) remain 1 London, The City 58.9 in second and third places respectively. Their strong performance 2 New York, Midtown 57.5 confirms their attractiveness: a high concentration of Fortune 3 Tokyo, Marunouchi 54.7 Global 500 companies' headquarters (10 in Midtown and 18 in 4 Paris, La Défense 52.0 Marunouchi) as well as a pool of very highly-skilled talent: 59% of 5 London, Canary Wharf 51.5 the population has a higher education qualification in Tokyo and 6 New York, Financial District 48.5 48% in New York. 7 Beijing, CBD 45.8 8 Seoul, Gangnam 45.6 • Paris La Défense remains at the fourth position thanks to a high 9 Singapore, Downtown Core 45.6 concentration of international headquarters (Fortune 500, SBF 10 Chicago, The Loop 45.6 120, and large consulting firms).