Real Estate and the Urban Landscape of Tomorrow

Real Estate and the Urban Landscape of Tomorrow

In an urban world of rapid social and spatial change, real estate finds itself at the heart of a paradox: While buildings are designed to leave a long-lasting mark on the urban landscape – particularly in European where architectural heritage is highly valued – they must also provide a springboard for inventing the city of tomorrow, which needs to be nimble, flexible and responsive to the fast changes in society. In an increasingly mobile world, how can immobile buildings serve as the backbone for the city of tomorrow and help usher in a new urban paradigm?

In just a few years, an ageing population, an increase in mobility for individuals and businesses, the internationalization of the economy, the increase flexibility of production methods, the rise of information and communication technologies as well as urban sprawl and the ecological crisis in all its dimensions, is changing our relationship with the urban environment. It’s changing the way we occupy homes, offices and business premises while impacting the ways we interact and get around between these spaces.

These evolutions leave us with some tough questions that concern real estate actors in the broadest sense: investors, project managers, architects, town planners, elected councilors etc. Indeed all of these changes are inextricably bound up with the spaces in which we live.

To find some answers, the Real Estate and Sustainable Development Chair – with the support of their partners La Poste Immo, Foncière des Régions and Form’a – conducted some 20 interviews with researchers, public actors and people from the business world who deal with these questions on a day-to-day basis. The results were compiled into the Chairs first “Cahier” – Real Estate and the changing society: ideas for the city of tomorrow. Its aim: to offer insights into the challenges social and urban change raises for real estate actors, to better understand their responses to these changes, and to determine how innovations will help sketch out the towns and cities of the future.

“Real estate actors are in the process of inventing practices that will in fact shape the urban environment,” says Ingrid Nappi-Choulet, Professor of Management and Director of ESSEC’s Real Estate and Sustainable Development Chair. “In addition to the recent boom in technological and technical innovations, deep-seated change is at work within society itself to take onboard new forms of work organization, new generations of employees, and new lifestyles and consumer habits. These social and cultural mutations are indeed changing the way we think about real estate.”

Real Estates, Innovation and Business

While the favored locations for business have varied over time, in the past, land price has been the primary concern behind corporate real estate investments. Today however, more and more companies are taking employee wellbeing into concern above other factors. Indeed, after moving away from the urban centers to cut real estate costs, firms have felt the effects of the limitations, economic and otherwise, of an approach that neglects the importance of employee wellbeing.

“Many the study respondents – including Microsoft’s Alain Crozier – feel that today employee wellbeing is of the utmost important,” adds Professor Nappi-Choulet. “All in all, many firms are recognizing that office location, proximity to local services and accessibility by way of public transit – in addition to quality interior fittings within the office environment – are all factors that contribute to better performance.”

How should the offices and warehouses of tomorrow be designed? While work habits evolve and businesses use communications technologies to allow employees to tele-commute, innovation and group work still need physical places that facilitate face-to-face communication between co-workers. Architects and designers are today developing flexible workspaces that can accommodate both individual and group work.

“This is just one example of how we’re transitioning towards a real estate economy in harmony with the actual uses of space,” explains Professor Nappi-Choulet. “Technologies are also making facility management more efficient while Information and communication technologies are opening up the path to changes in building design and management, particularly with regards to the interaction between buildings and the environment.”

Commercial property is also being affected by the rise of online retail, which is revolutionizing consumer habits and redefining the role of retail areas. It is also foregrounding new logistical issues, which for a long time were the blind spot of thinking on urban planning, and also have consequences for real estate.

Real Estate, Innovation and New Lifestyles

In the past, as workplaces spread outwards from urban centers, so too did households. However, in contrast to the office and retail sectors, the constantly rising land and property prices in the largest town centers are today preventing a return to downtown housing.  The resulting urban scrawl and longer commuting distances are putting more pressure on the environment, both locally as the expanding city encroaches on undeveloped land reserves, and globally as this sprawl leads to more use of motor vehicles. New technologies are helping us respond to the challenges of urban sprawl and its impact on residents and lifestyle.

The computerization of society over the last thirty years, the more recent spread of digital telecommunications, especially mobile communications, and the fact that institutions, firms, and individuals are all becoming producers of data, is leading to the emergence of an information layer that is superimposed on the different strata of the city. The term “intelligent city” is being used more and more often, not only to reflect the growing volume of digital data available, but more importantly to express the expectations of a city able to put the information layer to use for better allocation and management of urban resources and more effective network services.

“Smart grids for example, are energy networks that would allow large energy companies to take advantage of locally-available renewable energies, and offer technical solutions to modern urban problems,” adds Professor Nappi-Choulet. “And beyond the question of energy alone, the city’s emerging information layer also allows us to imagine new ways to share both objects, private spaces and other resources.”

While the rise of flexible workplaces does not signal the end of the traditional office, changes in lifestyles, working habits and consumer habits, marked by widespread mobility and the flexibility made possible by telecommunication techniques are generating new issues related to office buildings. The growing emphasis on “localness” as the ideal urban horizon leads us to question the function-based segmentation of our towns and cities Offices, like the other functions of the real estate space, must be connected to all urban resources.

Click here to read the full report and access interviews with Jean Viard (CNRS), Alain d’Iribarne (CNRS), Pierre Veltz, Nicolas Gilsoul, Ghislain Grimm (Form’a), Alain Crozier (Microsoft), Olivier Esteve (Foncière des régions), Christian Cleret (Poste Immo) amongst others. 

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