According to the United Nations, more than one half the world’s population live in urban areas, and almost all countries of the world are becoming increasingly urbanised. With this global phenomenon placing huge demands on infrastructure, real estate, policy, and climate, urbanisation represents a massive opportunity to create sophisticated environments and a raft of investable assets
• Driving economic development
According to PWC, in 2015, 85% of global GDP was generated in cities. By harnessing economies of scale, cities have the ability to add value for both people and companies. This means they are more productive than other economic structures, by attracting international firms, a pool of global investors, and sharing knowledge and ideas.
• Urban renaissance
Today, cities like Manchester, Liverpool and Birmingham are going through an urban renaissance; these cities are filled with smart new high-rise apartments, office blocks and retail and leisure facilities which demonstrate sophisticated urban environments and a shift in how people want to live.
• The urban opportunity
From the rise of AI and technological advancements to innovative next generation infrastructure that is more people-centric – urbanisation offers investors with a plethora of investment opportunities that spans the real estate sector.
• Repurpose assets
In the UK, urbanisation is reshaping in-town commercial environments as a greater variety of uses is required. Faced with diminished demand for physical retailing space, a succession of shopping centre owners is looking at repurposing assets to develop homes, hotels and leisure amenities. This follows the conversion of millions of square feet of office space into residential.
• Walkable cities
Lower levels of car use are also changing the property development sector and placing a greater emphasis on locations which are served by public transport or ‘walkable’. In the US it has been calculated that the value of real estate with a high ‘walkability’ factor has doubled since 2006. This represents more than four times the appreciation of comparable assets in car-dependent locations over the same period. Car usage by younger generations continues to fall substantially.