The city of
tomorrow

This has left infrastructure in many cities stretched thin. Cities not only have to provide additional space for people to live, work and gather, but also upscale transportation and energy systems to cope with the growing number of residents. Last but not least, as standards of living increase, they also have to accommodate higher expectations about individuality, mobility, digitalisation and sustainability.

At the same time, the way that people work and live together is changing. Things like online shopping and the shift to remote working are giving rise to new habits and expectations, as is the rising demand for smaller homes and the growing importance of the sharing economy. Moreover, as the average age of the population increases, there is a need for new utilities, health care and community structures. All the while, meeting global sustainability targets poses completely new challenges for city and property planning.

Cities are finding themselves in an unparalleled transformation process. They have to be greener and healthier, safer and smarter, less centralised and more social. New terms are constantly emerging to describe the latest city planning concepts, like "15 minute city", "vertical villages" and "third places", or "responsive city", "urban manufacturing" and "urban farming".

Profound change is taking place – virtually across the board. New concepts are needed for energy, telecommunications, mobility, shopping, culture and sports, education and waste management, just to name a few.

The fact that cities only account for two per cent of the earth's surface but consume 75 % of globally required energy demonstrates just how urgently these new concepts are needed. Designing cities in a climate-neutral way would be a critical contribution towards achieving the 1.5-degree target adopted by the international community.

However, that would mean that the buildings in cities would need to decarbonise significantly because buildings are responsible for roughly 40 % of all greenhouse gas emissions globally, three quarters of which are emitted during operations. Making buildings as climate-neutral as possible requires tremendous investment in renovation and reconstruction, and poses great challenges that property owners and banks will only be able to overcome by working hand in hand. But if those buildings are left without energy upgrades, it could cause a massive blow to property values.

All these changes also impact on the business models of companies active in the property, housing and energy sectors. The services they offer all have to accommodate the profound transformation taking shape in cities.

Property investors need to figure out what asset classes have a promising future in the city of tomorrow and which property concepts will have traction within those asset classes. Do office buildings have to be reconceived entirely? Do hotels and shopping centres need to reinvent themselves? And what requirements do residential buildings and logistics facilities need to meet in the city of tomorrow?

Companies that service the housing, property and energy sector need to figure out whether their business model will survive in the city of tomorrow, because even though new demands are emerging, new providers are entering the market and sectors are merging as digitalisation progresses. This all revolves around what business areas will still be profitable and competitive tomorrow and what needs to be done to capture them and/or expand there.