Strong growth attracts more investment and its true in case of cities too. For a city which is recording strong growth its much easier to attract companies, people and capital than others and this in turn supports future economic and social development. However, if such growth and consequent inflow is not governed properly it may create challenges leading to problems and then ending in a disaster. It all depends upon the leadership how to convert this short-term growth transitions into longer-term sustainable momentum. For a city to successfully transition from short-term momentum to long-term growth it must plan for a sustainable and inclusive future.
In this regard, and real estate can play a significant role in ensuring long-term, sustainable growth. Urban transformation, placemaking, increased transparency and sustainability are all key factors in real estate’s contribution to this transition.
Transparency is vital in securing the long-term investment that leads to sustainable growth. By working with city local bodies, the private sector can play a major role in driving this change and bring benefits not only to the real estate market but also to the wider commerciality of a city.
Take the case of China which has many dynamic cities. In recent years, strong momentum of these Chinese cities has been underpinned by massive infrastructure investment and real estate development. Yet the drivers of China’s cities are now changing as they tilt increasingly towards becoming more innovation-oriented economies. A new system of Chinese cities is evolving of truly global scale, where momentum is more and more dependent on levels of innovation, entrepreneurship and liveability. Another lesson that one has to learn from Chinese experiment is relating to environmental and transparency issues affecting their global competitiveness.
In fact, real estate can play a pivotal role in helping to address some of the cities challenges like environment issues and help in setting a city’s future development path. For example, major urban transformation projects can significantly alter a city’s trajectory – with new neighbourhoods and mixed-use developments helping to nurture new specialisms, improve lives, change a place’s meaning and have knock-on effects on its surroundings. Additionally, large-scale infrastructure plans can play a large part in tackling problems such as congestion and improving the flow of people around a city.
Its good to know that sustainability is the key topic at World Economic Forum with greater emphasis laid on the role of real estate in achieving the goal. There is no doubt that the built environment has a huge role to play in developing and implementing solutions, with technology, investment and robust governance central to success. Its not just the new constructions but also existing structures which have a significant role to play in the exercise. Green retrofitting of existing buildings, while potentially of higher cost in the short term, creates more resilient, competitive assets in the long term.
Further, finding ways to make buildings – from offices to homes – run more efficiently can make a big difference in terms of sustainability. From smart windows that minimise energy usage to microgrid-generated renewable power, ever-advancing technology is coming up with innovative potential solutions. In short, smart technology can significantly help to create an attractive, customized workplace environment, as well as enhance the efficiency of building operations. Fortunately, institutional and private equity investors are becoming increasingly conscious of the social and environmental impact of their investment decisions.
However, association of real estate should not be just restricted to creating some bold super-sized projects and impressive skylines. In-fact, the true value of real estate lies in providing the infrastructure and environment that facilitates creativity, collaboration, innovation and entrepreneurship.