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 o ice, 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
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
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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 shi ing 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 di erent. In