'Smart' is becoming the new normal. The word itself has changed slightly in meaning over the past 10 years, as new technologies emerge boasting even more features that help us manage and maintain our lives on a daily basis. Now it's more common to meet someone with a smart phone than not, while watches, TVs, washing machines and lighting systems in our homes are all becoming increasingly connected and attuned to our needs. Now, these real estate trends are taking on a bigger target, and we're starting to see a new modern phenomenon emerge: the smart city.
What is a smart city?
The United Nations has predicted that the global population will hit 9.7 billion in 2050, with 66% of people projected to live in cities. The smart city is part of this vision: our metropolises will become increasingly urbanised and more tech-heavy, with drones, autonomous vehicles and robots already being introduced into our modern service structures today.
These future cities will leverage data and technology to make life more comfortable for residents. Frost & Sullivan define the term as “cities built on ‘Smart’ […] solutions and technology that will lead to the adoption of at least five of the eight […] smart parameters”.
These parameters include smart energy – which we’ve already seen beginning, with heating systems controlled from your phone – as well as smart buildings, transport, healthcare, infrastructure, technology, governance, education and finally, the rather mysterious smart citizen. In terms of real estate trends, the ‘smart buildings’ parameter will have, and is having, the greatest implications and opportunities for the industry.
What is already happening?
Smart cities – or rather, the first incarnations of them – exist already. Barcelona and Singapore both have a base level of connectivity and integrated municipal services. Among other things, Barcelona has one of the cleanest surface public transport fleets in Europe, a bike sharing network and impressive green energy credentials. Its pneumatic waste management system automates rubbish collection in some districts, while underground delivery chutes decrease truck and noise pollution.
In the USA, Denver and Panasonic have worked together to designate a mixed-use development centre, Pena Station Next, as a hyper-connected community: a ‘smart city’ of sorts. Pena Station Next already has smart city solutions such as street lights mounted with security cameras and sensors, along with smart bus stops and parking meters. Here, Road X, an ‘intelligent’ Interstate 70, is already underway.
What does this mean for real estate trends?
Connected, smart buildings have the potential to reduce energy use, trigger preventative maintenance, and decrease operating costs. Utilising sensor technologies to track information such as motion, light, temperature and water flow, then automatically analysing the data to detect inefficiencies, and responding in a non-intrusive manner could all become part of how buildings function around us. According to JLL, smart buildings could improve general efficiency levels by 15-20% in the first year. In-depth building and occupant data would mean greater transparency in real estate transactions, allowing potential renters and buyers to better understand assets and commercial investors to better analyse the likely footfall.
The real estate industry has plenty of opportunities here to embrace smart city solutions and shape the evolution of these areas. The most obvious initial benefit for the property industry will be the enthusiasm and clamour of eco-conscious tenants, buyers and businesses to purchase a part of these efficient structures with lower running costs. Equally, however, the industry will need to move with the times and keep up with these changes as they come, to remain knowledgable and up-to-date with these increasingly common futuristic properties.