Publications

- June 1, 2021: Vol. 8, Number 6

Megacities, Sino-style

by Mike Consol

China has urbanized with unprecedented speed. About 20 years ago, only 30 percent of the Chinese population lived in cities; today it’s 60 percent. That translates to roughly 400 million people — more than the entire U.S. population — moving into China’s cities in the past two decades. And this migration isn’t over; 70 percent of China’s population is expected to be urban by 2035. To accommodate the influx, China has shifted from expanding individual cities to systematically building out massive city clusters, each of which will be home to as many as 100 million people. Cities in a cluster will collaborate economically, ecologically, and politically, the thinking goes, in turn boosting each region’s competitiveness. By 2035, five major city clusters are expected to be established. (The Download by MIT)

SELF-STORAGE

The self-storage business now stands at 1.5 billion square feet in the United States, having grown by 295 million square feet between 2011 and 2020. The self-storage and multifamily markets are interconnected, as shrinking home sizes, coupled with moving, lifestyle choices and downsizing, have been some of the main drivers of the self-storage industry. Dallas-Fort Worth was the fastest-growing U.S. market, adding more than 16.2 million square feet of self-storage from 2011 through 2020, as well as more than 173,000 apartment units, surpassing New York, Houston and Chicago in both respects. (RENTCafé)

PRECIOUS METAL

Technically, one might not consider copper a precious metal, but it is clearly becoming more precious to investors and industries. It takes four or five times as much copper to build an electric vehicle as one that runs on a combustion engine. Copper goes into the cabling for EV charging stations and into solar panels and wind turbines. At present, annual “green” demand for copper is 1 million tons, or just 3 percent of supply. That total is expected to reach 5.4 million tons by 2030. Here’s the problem: It takes two to three years to expand output at an existing copper mine, and a decade or more to develop a new one. (Goldman Sachs, The Economist)

LABOR PAINS

Why are U.S. workers becoming harder to find and causing U.S. labor shortages even though unemployment still runs high? Even though 8 million fewer people are working today than before the coronavirus pandemic struck, there is Delta Airlines forced to cancel 100 flights because of a staffing shortage. One café in Florida has turned to robots to greet customers and deliver food, for lack of human employees. And one McDonald’s branch is paying potential burger-flippers $50 just to turn up for a job interview. There are three potential explanations for the puzzling shortages: over-generous unemployment benefits; fearful workers; and a reallocation of labor between industries. (The Economist)

SOUND OF OPPORTUNITY

Podcasting is still a massive, untapped market opportunity. Witness the recent surge of interest from some of the world’s largest tech companies who are making podcasting a priority. Apple, Spotify, Facebook and Twitter are all making moves, among others. They have all recognized the opportunity for more growth in the space. New technology has made listening more accessible, and yet the total number of people who listen to podcasts makes it even more clear that adoption is still in its early stages. Terrestrial radio still reaches 91 percent of U.S. adults each week, while only 107 million Americans listened to podcasts during 2020, according to eMarketer. For radio, that translated to more than $10 billion in ad revenue, while podcasts earned less than $1 billion. There is reason to believe that podcasts are going to start making incursions into terrestrial radio’s lead, especially given that they’re overcoming the technical challenges that once held them back. Podcasting apps have long been terrible to use, but they’re starting to improve, especially after Spotify’s significant investment in the format forced the rest of the industry to up its game. Playing podcasts while driving — a key use case — has also been a pain, but that’s getting easier with in-car entertainment systems such as CarPlay. Connected speakers such as the Echo and Google Home make turning on a podcast in the house as easy as the radio. (Big Technology) 

 

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.

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