09.01.2023

Smart cities and the real estate sector

Connotated by a name that evokes 19th century science fiction films, smart cities are now a reality using the latest technological solutions to improve the management and efficiency of the urban environment. This name, used incorrectly by most and not always with full knowledge of the facts, generally refers to those “places where traditional networks and services are made more efficient with the use of digital solutions for the benefit of its inhabitants and businesses“.

In general, therefore, a smart city is an urban environment characterised by smarter urban transport networks, improved water supply and waste disposal facilities and more efficient ways of lighting and heating buildings. And also a more interactive and responsive city government, with safer public spaces and, in general, all those solutions that aim to meet the needs of the population.

Smart cities: historical background

Rio de Janeiro was the first city to implement smart technologies in a widespread manner, taking the name ‘smart city’, a term now known and used globally.

The European Community project

The Smart Cities Marketplace was created by merging two previous platforms, the ‘Marketplace of the European Innovation Partnership on Smart Cities and Communities (EIP-SCC Marketplace)’ and the ‘Smart Cities Information System (SCIS)’. It is a platform that aims to bring together cities, industry, SMEs, investors, banks, researchers and many other smart city actors. The Smart Cities Marketplace has many associates from all over Europe and beyond, many of whom are members of the platform. Their goals include improving the quality of life of citizens, increasing the competitiveness of European cities and industry, and achieving European energy and climate goals.

The main cross-cutting areas of activity of the Marketplace include:

  • sustainable urban mobility
  • sustainable districts and the built environment
  • integrated infrastructure and processes in the fields of energy, information and communication technology and transport
  • citizen focus
  • policy and regulation
  • integrated planning and management
  • knowledge sharing
  • baselines, performance indicators and metrics
  • open data governance
  • standards
  • business models, procurement and financing

The future of the world’s cities

It is now certain that, by 2050, the world population will amount to approximately 10 billion people, two-thirds of whom will live in urban centres or metropolises with more than 10 million inhabitants, some of which already exist today: New York, Tokyo, Shanghai, Mumbai, Mexico City, Istanbul, Kinshasa, etc. It is to these cities, but not only to them, that smart city projects are addressed, and are therefore intended as a solution for the management of huge complex systems of different types of infrastructure.

Smart cities and real estate

The link that exists between the planning of a smart city and the dynamics of the real estate sector is intuitive. The first consideration concerns the end users, which in the case of a smart city is certainly an inhabitant with a predisposition towards the use, and therefore consumption, of technology: it is therefore a subject that expects from its spaces a high level of performance, high quality and preservation of the value of its investment over time, aspects that are reflected in higher construction costs and, ultimately, in the market values of real estate that are therefore higher than those of older properties with lower technological performance.

On the other hand, looking at builders, designers and, in general, all operators in the real estate supply chain, the crucial aspect is the continuous updating of development plans to the ever-changing needs of users and available technological solutions, which are constantly changing as never before.

An Italian example

The first smart district project that will combine housing and service functions in a vast area of more than three hundred thousand square metres rises in the dimension of Greater Milan. Milano4You will be a true digital district able to offer a new model and lifestyle in line with the emerging needs of communities, including cost reduction, the psycho-physical wellbeing of inhabitants, connectivity and easy use of services. Designed for young and old, and in general for all categories of users, it aims to represent not only a residential complex, but a real community, where people play a fundamental active role by participating in the growth and improvement of the neighbourhood.