Real estate’s role in developing smart cities

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Cities are expanding at an unprecedented rate and so is their complexity. By 2050 the world will be populated by an estimated nine-billion people. Seventy percent of people will live in urban areas, many of them in new towns and mega-cities.

In order to be competitive, cities will need to be sustainable, have good transportation systems, and have high-density, mixed-use and efficient infrastructure with low carbon emissions. To support their vast urban populations, cities will increasingly rely on smart infrastructure to efficiently deliver vital services, such as power, water, public transit, distribution of goods and services, waste management and security.

The Smart Cities Council defines smart cities as those that have “digital technology embedded across all city functions,” while the Institute of Electrical and Electronics Engineers describes them as “bringing together technology, government and society” across the economy, mobility, environment, people, living and governance.

There are several reasons that smart cities should be of interest to developers, long-term investors and corporate real estate professionals. Perhaps the most obvious is that smart, sustainable cities command higher land and property values, which attract large-scale investors.

However, the real estate industry needs to understand that the buildings sector plays a huge role in helping to make cities smart. That is because the key to smart cities is data analytics – an important element of which relates to the millions of buildings and the huge masses of population that they accommodate. To gain maximum value from owning or managing assets in a smart city, the real estate itself should also be ‘smart’. Smart buildings and smart cities both generate and require big data.

The availability and integrated analytics of data can provide valuable insights on how the urban environment functions, including demographics, population density and people movement patterns, health options and recreational opportunities cross-referenced with property values, tax records, health records even down to how buildings use energy, water and materials, how they dispose of their waste. This data is valuable feeding stock of smart cities. Real-time and interval data from and about real estate reflects the level of commercial activity, industrial penetration and population movements within a city and its diverse micro-markets.

There are many sources and silos of real estate data – some of them public, others proprietary. The importance of citizen engagement and the value of public private (and private private) partnerships is indisputable in the development of smart cities. This is why the CRE sector needs to be an integral part of smart cities development process.

About the author:

Jiri Skopek is a Managing Director of Energy Sustainability Services at JLL. Skopek provides advice to owners and managers of large portfolios on sustainable development in the fields of design, asset and facility management, emergency preparedness, business continuity and smart building intelligence. Skopek is best known for developing Green Globes environmental assessment tools, which include modules for Design of New Buildings, Sustainable Interiors and Operation and Management of Existing Buildings (BOMA Canada/ GBI US), University Campuses (APPA) and Building Intelligence Quotient (BIQ).

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