Business megacities: on the road to lifestyle

"You can't be and have been". Well, you can! All over the world, the big business cities are putting the popular saying to rest. Indeed, what were the key metropolises at the end of the XIX^e century? New York and Chicago in the United States, London, Paris, Berlin and Moscow in Europe, Tokyo in Asia, Buenos Aires in South America. And today, who do we find at top four places of AT Kearney's Global Cities 2019 benchmark study dedicated to the megacities ? New York, London, Paris and Tokyo. Similarly, what are the the most attractive business districts in the world? According to the barometer published by EY in 2017, which will be updated in 2020, but whose findings should change only marginally: the City (1^er) and Canary Wharf (5^e) in London, Midtown (2^e) and the Financial District (6^e) in New York, Marunouchi (3^e) in Tokyo, La Défense (4^e) in Paris and the Loop (7^e) in Chicago.

Everything is changing and yet nothing is moving! Even though, throughout history and its vicissitudes, some of the chosen cities have obviously fallen by the wayside. For example, the very serious Frankfurt has replaced Berlin as the flagship city of post-war Germany, while post-Soviet Moscow is gradually catching up with its market economy. Buenos Aires, for its part, is no longer attracting immigrants by the millions as it did in the days of its wild prosperity based on immensely powerful agriculture, the "Argentine fever" having abruptly subsided with the crisis of 1929. Sao Paulo has since taken its place as the economic beacon of South America.

With demographic growth and the end of colonialism, other continental giants like MumbaiJohannesburg or Lagos have made their appearance on the world economic map as well as ultra-dynamic micro-cities such as SingaporeHong Kong and Dubai. And what about the incredible metamorphosis of Shanghai In 1990, the skyline of the Pudong district stood flush with the Huangpu river. In just thirty years, the rice-farmers' shacks and derelict shipyards have been transformed into a myriad of futuristic skyscrapers housing thousands of company headquarters. Like Beijing, Shanghai embodies China's ambitions, and more generally the pendulum swing of a world that is increasingly turning towards Asia.

If we look at the volume of investment in real estate and technology, the 'global city' effect means that Paris, London, New York, Chicago and Tokyo dwarf everything else.

Bruno Lunghipartner at PwC Société d'Avocats

Nevertheless, the stars of the western economy are still among the leading megacities. Buoyed by the dynamism of their business districts and driven by the effervescence of the new economy in their up-and-coming districts, New York, London, Tokyo and Paris are even well placed to still be leaders 30 years from now. Who could dethrone the City? Even theunbelievable BrexitDespite the instability that economic decision-makers do not appreciate, the financial crisis has not made the UK capital any less essential in the highly specialised financial sector, since its effects are likely to be much more noticeable for the rest of the British economy.

Of course, cautious investors looking for a European passport turned to Frankfurt or Dublin, while the European Banking Authority and the American insurer Chubb have moved to Paris... But most of these major moves have already been anticipated and should not call into question the observation of Vincent Raufast, senior manager at EY France: "if you want to exist in finance, it's basically City or nothing."

And one, and two, and three

What about New York, the centre of gravity of the world economy? It's hard to imagine it losing its superb reputation, when it's capable of spawning a new global economy in no time at all. third major business districtthe Hudson Yards ? Partly inaugurated this year, this building complex, as ambitious as Rockefeller Center was in its day, has already seen big names such as WarnerMedia, KKR, Wells Fargo, L'Oreal and SAP move in. Others such as Blackrock, the world's largest asset manager, will complete the picture by the time it is completed in 2022. In the same vein, how can we expect Mitsubishi, Mitsui or Hitachi to suddenly flee from Marunouchiwhile Tokyo's business district is the largest in the world. beating heart of the world's third-largest economy, home to no fewer than 18 head offices of Fortune Global 500 companies, compared with nine in New York Midtown, eight in the City and three in La Défense? "What sets the City, Midtown and Marunouchi apart is their international reach"says Vincent Raufast.

What sets the City, Midtown and Marunouchi apart is their international reach.
If you want to exist in finance, for example, it's the City or nothing.

Vincent RaufastSenior Manager, Ey France

In fact, very few can boast this pre-eminent dimension, with the exception of Shanghai and Beijing, which reflect the best in the world. China's growing importance Perhaps Singapore, the financial hub of Asia, but certainly not Paris yet. "These three major business districts are better positioned than La Défense are home to global companies and therefore attract a greater number of international decision-makers"says the manager of EY in France. With its diversified sectors - banking, but also energy and insurance - the Paris business district is more attractive than any other. general practitioner. "This is both a strength, because its performance is more consistent, and a weakness, because the district is less identified as a global business centre."says Vincent Raufast.

However, the Paris business district is not limiting its ambitions and is pursuing its development with 200,000 m² of new offices to be delivered within the next two years. "All business districts have the capacity to grow, but only the most powerful fill their towers, points out Franck Boucher, Director of Attractiveness at the Paris La Défense public body (see interview). If you look at the ones in Moscow or Dubai, they are very beautiful, but not all their offices are occupied. Our strength lies in being able to start projects from scratch, without waiting for them to be filled to 30 % or 50 %. That's proof of the market's confidence."Especially as the price per square metre, at €550 for the best premises, is still competitive compared with the City, where it is over €800, not to mention Paris itself, where the price per square metre is close to €1,000.

The fact that France has made it into the top 5 of AT Kearney's index of foreign direct investment intentions, ahead of Japan and China, augurs well for the future. beautiful days for the Paris business district and, indeed, for the entire economy of the French capital. The ability to attract capital, to bring investors and entrepreneurs together, to bring customers and partners together, is what makes the circle of growth go round. "If we look at the volume of investment in real estate or technology, the 'global city' effect that Paris, London, New York, Chicago or Tokyo crush everythingsays Bruno Lunghi, a partner at PwC Société d'Avocats. These megacities remain the engines of activity. They are machines for attracting equity. Cities with fewer than three or five million inhabitants have less capacity to raise funds, for example for research."

This provides megacities with the conditions they need to build their future with confidence. In fact, a close look at AT Kearney's Global Cities Outlook study, which puts the development potential of major cities into perspective, shows that Paris, London, New York and Tokyo are not far behind. to be ashamed of their capacity for innovation in the face of leading cities such as San FranciscoSingapore, Amsterdam or Boston. With its world-class universities, Cambridge and Oxford being the most renowned, London has a intellectual capital to compete with the bright minds coming out of Berkeley or MIT. In the same vein, the rate of higher education graduates is 59 % in Tokyo, 47 % in New York and 46 % in Paris. That's a lot of young talent to capitalise on.

Business growth potential is the primary criterion for locating a company, but the living environment on offer is increasingly becoming a key factor in the attractiveness of a business city.

Vladislava LovkovaDirector of PwC's strategy consulting business.

But at the end of the day, do all these talented young people dream of working the way they used to, in well-appointed offices in endless towers? This is precisely the cause for concern business district decision-makers. Because a little music is being heard more and more clearly; haunting refrains around the expectations of millenialsWe only have to look at the interest shown by the younger generations in places where they can divide their time between work, well-being and after works, and even in places where they can live in harmony with the environment. towns on a more human scale a more relaxed work-life balance.

"A company's business growth potential is the most important criterion for locating here, ahead of the stability of its investment.says Vladislava Iovkova, Director of Strategy&, PwC's strategy consulting arm. But the living environment is increasingly being added as a key element of attractiveness."As a result vertical" business districtsUnlike Midtown in New York or the City in London, these are not located in the heart of the city and need to expand their repertoire. "Out of the American downtown designed in the 60s, crowded during office hours and absolutely empty outside. A total turn-off"says Vincent Raufast. With their events and cultural spaces, trendy bars, green spaces and new forms of mobility, the major business districts are working hard to create an environment where life is good after 6pm. A 'work, live & play' spirit is needed to prevent promising executives from listening to the siren calls of up-and-coming districts, and to attract seasoned professionals who value their quality of life.

Defence has made lifestyle its main axis of development. Its extension beyond the Grande Arche has enabled thelocation of the ArenaA multi-purpose space that is part concert hall, part rugby stadium. On the other side of the district, towards the Seine, a bar, the Nodd, was inaugurated and has been filling up since last summer when the offices close. And it's like that everywhere. Hudson Yards in New York, which is still in the making, is directly in line with the trend, with a mix of state-of-the-art offices, top-of-the-range flats, bars, restaurants and shops galore. In Tokyo, property developer Mitsubishi Estate has set about changing Marunouchi's rather too-smooth image by adding a multitude of dining options and shopping malls at the foot of the towers.

But if there's one business district that sets the standard for its ability to reinvent itself, it's the Loop in Chicago. "Competing with other very attractive adjoining districts, the Loop has managed to reclaim the banks of the river, which are now covered with bars and restaurants.says Vincent Raufast. It has also taken strong initiatives in terms of entertainment, with almost daily events."

A growing loop in Chicago

And it's working! Mc Donalds, for example, has moved from its Oak Brook campus in the Chicago suburbs to the city centre. But, above all, the "windy city" is establishing itself as one of the world's most attractive shopping destinations. third high-tech hub in the United States after Silicon Valley and New York. "The Loop now has the highest number of millennials per square metre in the world"says PwC's Vladislava Iovkova. They will no doubt be even more so in the near future with the announcement of the installation of Uber in the former central post office, an Art Deco jewel in the city centre that has been transformed into a contemporary business centre. Facebook and Salesforce are also heading for the Loop, buoyed by the venue's creative atmosphere.

The current development of business districts is driven by an underlying desire to attract all these new players who are advocating a "green" business model. new way of workingand hierarchy, and they shun the old school business centres. This is where the challenge lies, in their ability to create a favourable environment for them to set up in order to put them in touch with the major companies facing disruption on all fronts. To encourage the cross-fertilisation of ideas, business districts are counting on a Trojan horse: the coworking spaces. According to BNP Paribas Real Estate, the City accounted for 40 % of flexible office space let in the UK capital in 2018. In Paris, while the majority of transactions are concentrated within the city walls, the Spaces, Wojo, Morning Coworking, Kwerk have also made their entry into the corporate world of La Défense, pending WeWork next year. Design, inspiring offices, crazy energy: a very 'new wave' way of looking at office life.