Nine out of 10 Least Environmentally Resilient Cities are in Asia-Pacific
CBRE Global Investors recently evaluated the vulnerability of cities worldwide to economic losses resulting from climate change. In its analysis, the company found that nine out of the 10 bottom-ranking cities are in the same geographic area — Asia-Pacific. The lone holdout? New Orleans, which came in as the second least-resilient city, beat out only by Mumbai, in India.
The index is based on four equally weighted risk factors: Flood risk, storm-surge risk, seismic risk and coping ability in the event of a natural disaster. The bottom five cities — Mumbai, New Orleans, Tapei, Shanghai and Auckland — ranked in the bottom tercile in two of the four risk factors.
Interestingly enough, three of the cities on the list also rank among the world’s most liquid real estate markets. Tokyo, ranked no. 6 in the bottom 10 scoring resilient cities, is the second most liquid market, according to Real Capital Analytics. Hong Kong and Shanghai placed 21st and 24th, respectively, on RCA’s liquidity score.
Meanwhile, the 10 most environmentally resilient cities are all in Europe, with Nuremberg, Munich and Oslo ranked first, second and third, respectively.
CBRE GI’s Andrew Angeli pointed out that investors have historically prioritized size and economic growth potential of a property market. However, investors have also overlooked current and future environmental risks.
“Some of the most successful cities globally are home to environmentally intensive uses, whether it is the critical mass of a local population or polluting industries,” he said, adding that many of the cities are in coastal areas or areas prone to earthquakes. “Conversely, some environmentally resilient cities are those that are more favorably positioned geographically, smaller in scale, and having a thinner investible universe.”
Pictured: Flooding from Hurricane Katrina, New Orleans
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