[UBS] Future cities will create US$1.5 trillion in global opportunities

Indonesia will move its capital in stages from Jakarta to Nusandara in East Kalimantan province, about 1,300 kilometers away, starting in August this year. Pavich Kesavawong, Thailand\’s deputy minister of climate change and environment, also said earlier that Bangkok may not be able to adapt to the world\’s current global warming trend, so the authorities have been considering moving the capital. From the first linear city in Saudi Arabia to the new cities of the Indonesian archipelago, a new wave of cities is taking root around the world. Investment bank UBS estimates the scale of construction projects at more than $1.5 trillion and is using the insights of its global industry team to identify companies that will benefit from this phase of construction. Lian Peikun, Director of Greater China Research at UBS Investment Bank, said: \”Currently urbanization has promoted the prosperity of successful cities. We have further discovered five emerging themes, namely the growth of livable demand, mixed life-work-entertainment communities, Deepening connectivity, smart cities and green cities – we believe these themes will drive cities into the future.” UBS further pointed out through case studies what macro and investment opportunities these themes will bring. Indonesia is solving the environmental and socio-economic problems facing Jakarta by building a new capital, Nusantara. Elsewhere in Asia, China’s Guangdong-Hong Kong-Macao Greater Bay Area and the Singapore-Johor Joint Network illustrate how deepening urban interconnection can enhance mutual synergy. We also look beyond Asia, with U.S., European and Middle Eastern equity implications also discussed. Indonesia: A tale of two cities points to a sustainable future

Indonesia will move its capital in phases from Jakarta to Nusandara in East Kalimantan province, about 1,300 kilometers away, starting in August this year.
Pavich Kesavawong, Thailand\’s deputy minister of climate change and environment, also said earlier that Bangkok may not be able to adapt to the world\’s current global warming trend, so the authorities have been considering moving the capital.
From the first linear city in Saudi Arabia to the new cities of the Indonesian archipelago, new cities are taking root around the world.
Investment bank UBS estimates the scale of construction projects at more than $1.5 trillion and uses the insights of its global industry team to identify companies that will benefit from this phase of construction.
Lian Peikun, Director of Greater China Research at UBS Investment Bank, said: \”Currently urbanization has driven successful cities to prosper. We further discovered five emerging themes, namely, growing demand for livability, mixed life-work-play communities, and deepening interconnection. , smart cities and green cities – we believe these are themes that will drive cities into the future.
UBS further pointed out through case studies what macro and investment opportunities these themes will bring.
Indonesia is solving the environmental and socio-economic problems facing Jakarta by building a new capital, Nusantara.
Elsewhere in Asia, China\’s Guangdong-Hong Kong-Macao Greater Bay Area and the Singapore-Johor joint network illustrate how deepening urban interconnection can enhance mutual synergy.
We are also looking beyond Asia as US, European and Middle Eastern equity impacts are also discussed.
Indonesia: A Tale of Two Cities points to a sustainable future. The Indonesian government hopes that moving the capital to Nusantara will not only achieve growth redistribution, but also address the many challenges faced by Jakarta such as overpopulation, traffic congestion, and serious subsidence.
Indeed, as UBS Evidence Lab scenario analysis shows, up to 28% of northern Jakarta could be flooded over the next 20-30 years, displacing approximately 3 million residents.
The combination of these factors and the new city will create new demands for homes and amenities in Nusantara.
Our interactive model shows developers can estimate the size of their built environment projects at $92 billion.
Johor/Singapore and the Greater Bay Area: Two major regions are gaining momentum. Not all new cities are built from scratch. Existing cities can also work together to break growth constraints.
The Johor-Singapore Special Economic Zone is benefiting from complementary ties that already exist between the two places.
Johor can gain increments in exports, foreign direct investment and tourism, while Singapore can benefit from productivity improvements, land resources and labor optimization.
We estimate that Malaysia’s GDP growth may increase by 0.2-0.4 percentage points and Singapore’s by 0.2-0.6 percentage points over the next 10 years.
On the Chinese side, the Guangdong-Hong Kong-Macao Greater Bay Area is promoting the redistribution of talent, capital and goods from Guangdong-Hong Kong-Macau to satellite cities, thereby opening a new chapter in economic growth and wealth creation.
Sector and Stock Positioning for the Future We favor real estate developers that can create hybrid live-work-play communities.
In Asia, the theme of the Greater Bay Area is the most urgent; Indonesian developers have become the starting point for the layout of Nusantara.
Global contractors who create the backbone of cities and basic materials companies that build their bedrock may also benefit.
Additionally, we like banks and their role in financing new town projects.
The Saudi NEOM project will bring high growth potential to the MENA banking industry.

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