Many countries around the world are becoming increasingly urbanised and cities are being re-imagined. Rapid regeneration coupled with advances in technology have forced real estate developers to think of innovative ways to embrace the changing needs of residents in cities that are adopting a “smart” approach to development.
“One of the biggest trends shaping future property development and investment is the fact that people are sharing properties,” says George Radford, head of Africa at IP Global. “The shared home space is no longer the domain of students, but it is also appealing to sophisticated professionals who demand certain services and amenities to support their residential choices.”
This scenario is currently playing out in the City of Cape Town, with some letting portals reporting that 10% of their applications are from house shares or subletting within a single property – a percentage that has doubled since the beginning of the year. In response, homeowners would, for example, have to consider whether to install separate electricity meters in each room and other ways to make spaces self-contained.
Reports suggest that new findings from Pew Research Centre shows that “…in the United States last year, almost 79 million adults – or 31.9% of the country’s adult population – lived in shared households.”
Evolving mixed-use developments
Radford says that many real estate projects around the world are now built as multi-use destinations, incorporating residential accommodation, shops, work spaces and restaurants, all within the same building or precinct.
According to a PwC report titled Emerging Trends in Real Estate – Shaping the Future, however, these developments are continuing to evolve.
Radford explains that the report points out that traditional demarcations might disappear altogether as mixed-use paves the way for omni-use complexes in which people live, work and play within the same effortlessly connected environment.
Globally, as more people work flexible hours, this “space as a service” trend is taking off. One example is Amsterdam’s Zoku, which offers short-stay and long-stay options for mobile professionals, along with longer-term home and office apartments with common areas for eating, working and socialising.
WeLive offers studios and apartments in New York and Washington DC, with shared facilities that include laundry rooms, bars, event spaces, communal kitchens roof decks and hot tubs. People can stay for a few nights or sign longer leases.
Creating diverse and integrated environments, the Überseequartier in Hamburg’s HafenCity, includes a new cruise terminal as well as retail, catering, residential and entertainment facilities.
Technology shaping our cities
Radford says tech companies are taking notice and are responding to this new way of living and working. A recent collaboration between Amazon and some residential landlords, has led to locker rooms being installed in rental sites allowing for fast delivery of both Amazon and non-Amazon products and lower costs for “last mile” delivery, typically a personal residence.
Cities that are “future-proof” are already high-tech, but their town planners and city managers are investing in long-term infrastructure development to support these new ways of living and working.
Transport is a key factor in future-proofing a city, as is exemplified by Tokyo and Seoul’s investment in such projects – Seoul’s Pangyo Techno Valley, and Tokyo’s planned autonomous public transport system. Transport efficiency is also crucial in supporting densification and development in Europe’s most technically advanced cities, including Edinburgh, Copenhagen and Berlin.
“Berlin, with its fast-growing tech startup culture, is a fantastic place to work, live and invest,” says Radford. “People are drawn to its comparatively low accommodation costs and efficient transport network, meaning that it’s easy to live near to where you work. It’s also a fantastic property investment destination.”
According to the PwC report, Berlin ranks first in four important categories: Investment and Development Prospects, Expected Increase in Amount Invested, Expected Increase in Rents, and Expected increase in Capital Values.
“It’s clear that future thinking defines a city’s development and investment successes,” says Radford.
“As we continue to grapple with urbanisation, densification, rising accommodation costs, and flexible working and living demands globally, the cities that will continue to thrive are those that have developed working solutions to all these needs. Investors would do well to look for those opportunities that answer to the needs of residents, not only today, but evolving into the future,” he concludes.