The pandemic is an opportunity to innovate and shape the successful cities of the future, delegates heard at Real Asset Media’s Investing in Cities: Past, Present & Future of Urban Investments briefing, which was held online recently on the REALX.Global platform.
“The problem for many cities is that they won’t look the same when people return to them because so many shops have closed down,” said Daniel Harris, managing director, head of European investments, Cain International. “It will be a terrible shock, but it will create innovation.”
The lockdowns have accelerated the devastation on the high street, particularly in the UK, leading to mass closures. In London’s flagship Oxford Street 50% of the shops have gone, from big department stores to small sandwich shops, and the situation is even worse in Britain’s regional cities and smaller towns.
“Everyone has been focusing on the future of the office, but they are missing the point,” said Harris. “Retail rather than offices will determine the success of cities in future, that is the biggest challenge. Rebuilding the high street will be the story of the next ten years.”
In future, city centres will have to be more mixed-use, more experience-led and more inclusive if they want to attract people.
Helping cities manage their transition creates huge opportunity
“We’ve been given an opportunity by changes in the retail sector across Europe,” said Oliver Kummerfeldt, European real estate analyst, Schroders. “A chance to innovate and transform those spaces into residential, medical centres, student housing, labs and more. There are huge opportunities in helping cities manage the transition.”
The possibilities are endless, but there are practical challenges to be overcome, especially for landlords and for city authorities.
“Reviving city centres is a challenge, but also a huge opportunity,” said Nils Hübener, CIO, Corestate Capital Group. “It is also a political question: in Germany for example it’s a requirement to include affordable housing in city centre schemes, to create a sustainable urban fabric.”
Creating and curating spaces, fostering inclusivity, providing leisure, culture and entertainment, community hubs, gardens and green spaces will make cities more attractive and more resilient.
“People still want to live in a city,” said Harris. “But they want to live in a more appealing city.”