Why Corporate Real Estate should be interested in smart cities

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Buildings are central to the transition towards smarter, more sustainable cities. The buildings sector must invest in smart solutions in order to capitalize on the exciting and unexplored opportunities this trend promises.


Cities are expanding at an unprecedented rate and so is their complexity. In the UK alone, an extra 5.2 million city dwellers are expected by 2037 – and we are not on top of our housing shortage or air quality even at current population levels. Buildings are the fabric of any city and they will form an important part of the transition towards smarter, more sustainable cities in the coming years.

Smart infrastructure is key to a city’s success
In order to be competitive, cities need to be sustainable, have good transport links, high density, mixed use and efficient infrastructure. Smart infrastructure makes the delivery of vital services to vast – and growing – urban populations far more practicable: several councils have already begun installing sensors around London with the aim of creating a more efficient, smarter city.

What does property have to do with it?
Smart cities should be of interest to developers, long-term investors and corporate real estate professionals for a number of reasons but not least because they’ve been linked to higher land and property values. But it’s important to remember that smart buildings play a huge role in the transition too, partly due to data analytics they provide – something so key to smart cities – which relate millions of buildings to the vast numbers of people they accommodate. The most innovative buildings can already do this. Deloitte’s The Edge, in Amsterdam, is perhaps an overused case study but is nonetheless relevant. Equipped with more than 30,000 sensors, employees are connected to the building via an app, which helps them to find parking spaces, desks or even other colleagues. Sensors are also used to monitor temperature, movement, light, CO2 and humidity. As a result it uses 70 per cent less electricity than comparable office buildings.

People data – a valuable addition to building data
The use of advanced sensor systems and the adoption of mobile and wearable devices, combined with the IoT and other data, will completely transform the services a building can deliver. It can provide a treasure trove of information on, among other things, occupancy, people’s movements and work patterns, their behaviours and choices. This ‘people data’ can then be cross-referenced with other information to facilitate business planning and decision-making. It also means we can shape and design buildings around people’s needs and experiences and at the same time optimize space, energy use and so on.

Beware of trading privacy for efficiency
However, there are valid privacy concerns surrounding the data intrinsic to smart buildings. Several companies including marketing company Renew have recently experienced a major backlash for using data without people’s consent. There are workarounds, though they may be imperfect: Deloitte’s employees can choose whether to divulge their location to the Edge – however, it has been suggested that it’s not really a choice if it ends up affecting their career opportunities.

Smart buildings are an important part of the smart city transition. Property companies would do well to begin investing in the trend to ensure that they successfully navigate the emerging field and capitalize on the many exciting and unexplored opportunities it promises.

This article has been compiled by Emilija Emma and edited by Laura Jockers in JLL’s Upstream Sustainability Services Team. It is based on an article first written by JLL’s Jiri Skopek for JLL’s Green Blog

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