Real Estate Investor Magazine South Africa June 2018 | Page 48

URBAN
Investing In a City
That Lasts
What to look for and where to avoid
BY MONIQUE DU TOIT
I
nvesting in an urban area has been highlighted time and
time again as the next big opportunity in real estate. Tom
Walker, co-head of Global Real Estate Securities at Schro-
ders, sat down with us to discuss the top things to look for
when getting into an inner-city investment.
“With all the the disruption that’s been happening in tech-
nology, one clear trend has remained untouched: urbanisation.
Now, more than ever, companies and graduates want to be in
a location that’s part of the action,” he explains. Back in the
day, many companies gravitated towards building autono-
mous campuses, oftentimes out of the city, where employees
were able to work largely undisturbed. In today’s market, an
ever-growing number of companies have reversed this trend,
instead opting for offices within major hubs, where employees
are able to live, work, and play in the same area.
A city that moves
There’s been a marked increase in companies deciding to
downsize their physical offices, with the help of technologi-
cal advances that enable employees to work remotely. Walker
emphasises, however, that the need for face-to-face interaction
will always be there. It’s for this reason that truly global cities
are increasingly focusing on their transport infrastructure. “A
city that can’t move its people efficiently, isn’t a good place to
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JUNE/JULY 2018 SA Real Estate Investor Magazine
invest,” he says, explaining that efficient transport networks are
key to a healthy and thriving environment.
On a global scale, this is evident in projects like the Grand
Paris Project and London’s Crossrail. Locally, we’ve seen local
government investing vast sums into projects like MyCity and
Gautrain.
A city that caters for everyone
Walker points out that, although innovation and develop-
ment in a city is crucial, this can’t be at the expense of those
living there. He explains that, for a city to be sustainable and
remain relevant, it needs to cater to all those who call it home:
“The cities that deal with rising inequality in the best ways will
be the ones that attract the big companies and, by extension,
jobs and opportunity.”
This focus is evident in global and local efforts to incorpo-
rate social housing into a city’s planning. Walker notes that
they’ve seen a definite change in local governments’ approach
to developments, with a marked increase in focusing on af-
fordable housing as opposed to developments that purely cater
for the 1%. “The moment a city caters only for the elite, it’s
starting to decay,” he notes. Instead, truly global cities strive to
attract talent by incorporating a diversified economy.
Developers and investors need to keep this in mind, as those