The transformation of urban areas into economic power hubs and what this means for the property industry was the focus of the recent MIPIM conference in France
If the world’s population really does, as predicted, increase by 3.6 per cent in the next decade, it won’t be long before our planet has to accommodate 8.5 billion of us. That wouldn’t be too much of a challenge for the real estate industry if we were all equally spread out. However, as we’ve already started to see, the majority of people are choosing the cities over the countryside. To that end, it is forecast that by 2030 there will be 41 megacities (very big cities, typically with populations around the 10 million mark). And by 2050, 6.4 billion of us will be city dwellers. All of which is forcing the property industry to rethink urban life as we know it.
The 29th MIPIM conference and exhibition took place in Cannes in March. The event gathers property players from the office, residential, retail, healthcare and other sectors to debate topical issues facing the property industry. This year’s conference took as its theme Mapping World Urbanity, addressing three key questions.
WHAT WILL IT MEAN TO DEVELOP AND INVEST IN REAL ESTATE WHEN CITIES RULE THE WORLD?
It appears the property sphere agrees with the OECD’s Debra Mountford when she claims: “In this global age, there’s no choice but to involve and engage.” But involve and engage who, exactly? The general consensus suggests the occupier is now at the heart of the discourse. Once overlooked, the long-term needs of occupiers are now paving the way when it comes to development and investment opportunities. There’s even a newish industry buzzword to boot – the ‘UX’ (user experience). The real estate industry is starting to pay more attention to the way buildings support the people using them, and how buildings need to be fully flexible in order to adapt and support shifting demographics and expectations.
Yolande Barnes, Head of World Research at Savills, believes demographic change, specifically an aging population coupled with a shrinking workforce, means that talent is now at a premium. Occupiers are increasingly concerned about keeping human talent in the city, which means investors have to pay more attention to human trends. It’s not just about the building and the yield any more; it’s about working with the people the buildings serve. More attention is being placed on how real estate is managed, and, according to Barnes, the industry “is going to look more at how much it costs to run these buildings in the long term” before deciding to invest.
This is good news for facilities management, which should now earn the credibility and respect it deserves.
WHAT WILL URBAN LIFE BE LIKE IN 2030 OR 2050?
According to Schindler Group’s video showcase, it will be pretty different. In the future, we could see entire cities of interconnected skyscrapers, complete with inbuilt parks, nature reserves and lakes, sporting rooftop gardens, vertical greenhouses and purpose-built rivers for those who would rather swap the stressful commute for a swim to the office.
Underpinning the picture-perfect cities of the future is the idea of community – a theme that dominated this year’s MIPIM. With the right level of investment (in time, money, effort and imagination), megacities could be designed and managed to banish the loneliness associated with overpopulated urban life. Goodbye concrete jungles; hello eco-havens in the clouds.
If that’s too pie in the sky, let’s bring it back to what we can already see happening this side of 2050. We’ve only skimmed the surface of technology, which will be increasingly used to improve efficiency and experience. There are already driverless trains in China and driverless taxis in Japan, so it won’t be long before the way we commute and interact with our cities is dramatically overhauled. In some pockets of the world, people can already interact with their bus stops – not to the point of a meaningful conversation, of course, but there’s still a sort of dialogue between spaces and faces.
Amanda Clack, Executive Director at CBRE, believes designing such assets to ‘talk’ to people can help address the loneliness problem. The UK is the first country to appoint a Minister of Loneliness; a signal that this issue that affects about nine million Brits, young and old, will not disappear on its own. Action is required, and assets and spaces that can work to promote a sense of community is a step in the right direction.
Whatever way you look at it, urban life will be a busy, bustling hotbed for property investors and developers. But it’ll be down to the FM community to work with property teams to drive a human-centric agenda.
WHAT WILL BE THE BEST STRATEGIES FOR BUILDING CITIES IN THIS GLOBALISED WORLD?
There is now a deeper appreciation that the places where we live, work and play actually shape who we become – so the best strategies will be wrapped around people.
In one of the sessions, Richard McCarthy, Executive Director at Capita Property and Infrastructure, pointed out: “How you expect buildings and cities to operate should influence how we plan and shape them.” But it’s not just about expectations, it’s also about aspirations. Keynote speaker Adora Svitak, writer, speaker and advocate (and just 20 years old), suggested the industry should make a case for adopting new eyes and ears to see different types of people, because building a vision requires tuning into the attitudes of youth, social justice, and our innate desire for meaning and community. “Urban design isn’t just a logistical challenge,” she said. “It’s a modern one. And we have to think about what we are and what we want to become.”
Svitak laid out a new set of rules to help build, quite literally, a better world and a brighter future.
- Build accessible spaces that help people get to know each other, and make these spaces work for every generation – from the cradle to the crave.
- Involve youth as stakeholders during the decision-making process, because the things that younger people want are good for communities on the whole.
- Appreciate that design is less an expression of hierarchy and more a statement of our collective dreams.
- Design for communities, not for individuals, and bring people of all backgrounds emotionally closer.
Ronan Vaspart, MIPIM Director, declared that ‘boldness’ and ‘imagination’ are key words in 2018. Asking a 20-year-old to deliver the keynote speech to an industry that is stereotypically middle-aged is a pretty bold and imaginative move. But of course, it’s not all about the millennials, despite what the mainstream media might claim. Jackie Newstead, Global Head of Real Estate at Hogan Lovells, noted the total lack of investment in senior living in the UK compared to countries like the US and China and argued “we have to make our cities fit for the young, but we have to make them fit for the old too.” Clack, agreed: “We need to recognise there’s a number of different generations if we’re to build a people-centric city.”
So, in the pursuit to build fair, inclusive, resilient, affordable, energetic, and environmentally, socially and financially sustainable cities, we have to think of the ways that a space can bring people together to reduce inequality and improve quality of life. Since the occupiers are now in the limelight, real estate and FM professionals should be increasingly working together as a united team, driven by the overarching and shared objective to improve both efficiency and experience.
But it goes further than that. By adopting a more anthropocentric approach to facilities and real estate design and management, the cities of tomorrow could address and combat the social ills that are stunting our growth; they could also encourage social cohesion and create a more socially just world.