Debate is raging on what the city of the future will look like, with the pandemic serving to hasten many of the trends that were already reshaping our urban landscape and real estate markets. JLL’s report ‘Regeneration Shaping the built environment to create value for all’ shows the opportunity and accountability for real estate to regenerate cities. Findings of the report indicate that technology, sustainability pressures and shifting workforce and consumer preferences are driving change in the way that land and buildings are used. These shifts have accelerated the impetus for investors, developers and occupiers to work closely with city authorities to rethink the future of the urban landscape.

Moving forward with sustainable urban regeneration

With buildings accounting for 40% of global greenhouse gas emissions, and as much as 60%-70% in urban areas, the role of the real estate industry in the race to net zero cannot be understated. JLL insights point that investor and corporate real estate strategies are evolving to address this issue. But further and bolder action is needed. Over 80% of companies and nearly 80% of investors agree that climate risk poses a financial risk. More than 70% of investors say that green strategies lead to increased occupancy, rents, tenant retention and overall higher value. For businesses, sustainability is a key criterion in the way they acquire, fit out and manage their assets. 82% agree that their employees will increasingly demand green and sustainable spaces, indicating that going forward, organisations will be far more selective about the types of spaces they occupy. They will gravitate towards tech-enabled, high-quality, amenity-rich, and sustainable office buildings.

Going further and faster with the end-user in mind

Addressing people’s changing needs and tacking the decarbonization challenge is calling for a much greater collaboration between the private sector, including all real estate stakeholders, and local authorities and citizens. There is a clear opportunity and responsibility for regeneration projects to be designed and delivered by involving the end-user at every stage of the process, and where the outcomes are focused on creating purposeful and resilient places.  

“There is an unprecedented opportunity for real estate to regenerate the built environment in a sustainable and responsible manner. But the pressures we’re witnessing to move to a low-carbon, climate-resilient economy and to build a more equitable society can only be achieved through a much deeper public-private partnership. We need to go further and faster,” said Walid Goudiard, Head of Project and Development Services, EMEA, JLL. “Multi-stakeholder engagement and investment is central to addressing the regeneration urgency. Net-zero goals should be sought in tandem with social goals for the transition itself to be sustainable over the long term. Now more than ever there is a chance and a need, to reimagine the plan, design and fit-out of built environments to ensure they are human, innovative, and resilient.”

Adopting data driven approaches

Technology is a key enabler for all stakeholders to understand the underlying dynamics of cities. Data is probably the single biggest catalyst for green progress, with enhanced data capabilities providing opportunities for continuous improvements. Data and technology are also essential for transparent reporting and holding companies and cities to account.

New value creation framework

The need to repurpose the built environment in sustainable and responsible ways requires a shift in the criteria for assessing return on investment. A new value-creation paradigm requires a holistic approach that combines financial, environmental as well as ‘social’ impact, focused on the end-user.

Richa Walia, Director, Corporate Research & Strategy, EMEA, JLL, added: “The opportunity for real estate to drive sustainable value and positive impact for the future of cities is enormous. Long-term financial, environmental and social value can be delivered through regeneration strategies built on a deep understanding of urban dynamics, sustainability and end-user experience, alongside the current and future potential of real estate assets.

From creating greener urban hubs to regenerating neighbourhoods, encouraging social interaction, and supporting communities, real estate can drive real impact and to lead the way towards a sustainable, equitable, healthier and resilient future for generations to come.”