21st‐century transnational real estate development: What, where, who, how and why?

Abstract

In this paper, we review the emerging geographical literature dealing with large‐scale transnational real estate development projects (TREDs). Predominantly geared towards (often imagined) upper middle classes through eye‐catching and mixed‐use projects, the distinctive feature of TREDs is that they are facilitated by a formative transnational investor/developer. Based on a literature review and an analysis of fDi Markets data, we discuss the nature of TREDs, where they can be found, which actors and companies are mainly responsible for them, how they emerge and materialize (or not), and why they are so relevant in contemporary economic geography. It is argued that TREDs are both characteristic of and contribute to the rise of authoritarian urban development practices. We furthermore show that both fictitious and symbolic capital play a role and that real estate and geopolitical strategies are inextricably linked with one another. Given that interscalar dynamics between the main facilitators of TREDs are still relatively understudied within economic geography, we end with a call to develop more in‐depth perspectives on these matters.

Urban speculation for survival: Adaptations and negotiations in Forest City, Malaysia

“…Broadly, speculation describes expectations of increased future value or, ‘the making present and materializing of uncertain futures’ for profit (Bear et al, 2015: 387), as new urban infrastructure is constructed for ‘primarily political or economic purposes, rather than to meet real […] demographic or market demand’ (Marcinkoski, 2016: 10). Speculative urbanism is a useful framework for understanding the emergence of urban megaprojects and transnational real estate developments (TREDs) (Koelemaij and Derudder, 2021), including the role of local actors in monetizing land to facilitate large-scale foreign investment in local housing markets (Shatkin, 2016). In his research on urban transformations in Bengaluru, Goldman (2011) conceptualizes speculative urbanism as a transformative mode of urban development and governance built on new ‘alternative’ forms of finance capital; new governmental reforms aimed at acquiring land for foreign housing and real estate investment; the financialization and assetization of urban land, housing, and infrastructure; and the expansion of neoliberal economic reforms, urban inter-referencing, and transnational policy experts (Goldman, 2020: 1252).…”

“…For example, Koh et al (2021) link speculative urbanism to Forest City’s green identity, arguing that the project leverages its green brand for economic purposes. Urban mega - developments are highly speculative due to their supply-driven nature (Koelemaij and Derudder, 2021), uncertainty of success, and dependence on market conditions as their developers seek to extract value from real estate sales (Shin, 2016) and skyrocketing land prices (Goldman, 2020). Although foreign investors and private developers play significant roles in financing and building speculative megaprojects, state actors are actively involved in dreaming up, planning, facilitating, and leasing land for new, elite, large-scale real estate developments and spaces of exception (Goldman, 2011; Koelemaij and Derudder, 2021; Shin, 2016; Zhang, 2017).…”

“…Urban mega - developments are highly speculative due to their supply-driven nature (Koelemaij and Derudder, 2021), uncertainty of success, and dependence on market conditions as their developers seek to extract value from real estate sales (Shin, 2016) and skyrocketing land prices (Goldman, 2020). Although foreign investors and private developers play significant roles in financing and building speculative megaprojects, state actors are actively involved in dreaming up, planning, facilitating, and leasing land for new, elite, large-scale real estate developments and spaces of exception (Goldman, 2011; Koelemaij and Derudder, 2021; Shin, 2016; Zhang, 2017). Despite the risks associated with speculative urban development – including market crashes, uneven distribution of benefits, public debt, and environmental degradation – urban inter-referencing, aspirations to be the next ‘world city’, and competition to attract global finance capital and investment continue to drive the inception of spectacular and speculative urban megaprojects across Asia and beyond.…”

“…Yet, despite the ‘white canvas’ the Sultan and Country Garden envisioned, Forest City’s implementation and construction processes have been neither straightforward nor smooth, as CGPV has navigated several delays and roadblocks including a stop work order, political threats, border closures, and precarious finances. Scholarship on speculative urbanism focuses primarily on the actors, financial mechanisms, and governmental reforms that facilitate the inception of such megaprojects (Goldman, 2011, 2020; Koelemaij and Derudder, 2021; Koh, 2021), rather than the survival strategies pursued by the developers to mitigate financial risk after construction begins and properties are sold. Forest City embodies several of the key characteristics of speculative urbanism (Goldman, 2020), including the exceptions to existing regulations granted by the Sultan to Country Garden to encourage foreign investment, the involvement of the Johor sovereign wealth fund (KPRJ) in Forest City, and the financialization of land and urban infrastructure.…”

City Diplomacy Research at the Crossroads

“…2019; Koelemaij et al . 2023) and transnational urban real estate development (Koelemaij 2021; Koelemaij & Derudder 2021). In addition, both of us collaborated for more than 5 years at Ghent University as part of a course entitled Urbanization in Global Perspective .…”