Investors, Urban Regeneration and a Holistic Viewpoint
In the past, urban regeneration and renovation took place one building at a time. But this could be changing, and is something of which investors might want to take note.
According to a recent JLL article, urban renewal is involving “more inclusive placemaking, responsible investing, and community engagement.” The upshot? A more holistic viewpoint on regeneration, as well as a longer view return on investments. Another result is likely to be more emphasis on, and consideration for, projects that focus on benefits other than financial.
JLL experts note that the reason for the shift is due to increased expectations that developers and investors should act more responsibly, rather than focusing solely on a profit motive. To meet that expectation, real estate investors and developers are seeking out more partnerships with the public sector to help focus on bigger pictures.
“There’s a broader responsibility beyond the requirement to deliver quick wins for shareholders as investors move towards decisions based on less overtly quantifiable factors,” explained Jeremy Kelly, lead director of Global Cities Research at JLL. He went on to say that real estate businesses are expected to play a greater role in areas such as sustainability and equitable futures. Additionally, “institutional investors are among the most astute at seeing the long-term horizon, given their capital requirements,” he added.
One such example is the 52-acre Canada Water masterplan, a mixed-use project in central London. Under the development auspices of British Land, the project will offer educational, residential, retail and commercial components. Furthermore, British Land’s partnership with local community partners and organizations will include a “Social Regeneration Charter” with a focus on green spaces, public transportation links and inclusion of groups from all incomes, ages and life stages.
Beyond the idea of “doing well to do good,” there are practical reasons for a holistic viewpoint when it comes to capital investments in real estate. “In recent years, investors and developers have been struggling to find value, given the low yield environment of recent years. This is where holistic thinking can really make a difference,” says Jon Neale, head of UK research at JLL.
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