Be smart about it

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You've probably heard the term Smart City. But how do you know if you're living in one? Cities like Singapore and Amsterdam are well into their smart city journeys driven by rapid urbanisation and sustainable solutions. The groundwork for smart cities is real estate.

In some ways, the advent of smart cities was inevitable. Throughout history, technology has played a crucial role in the evolution of cities. Think about urban sanitation. It can be traced back to the Indus Valley civilisation. Look how far cities have come since then, with some using sensors and AI to keep track of sewage networks. Real estate and smart cities go hand-in-hand and are expected to be more intertwined than ever before.

Rethinking urban development

Smart cities have redefined how we think about urban development, particularly within the real estate and construction sectors. The concept is simple - emerging technologies like the Internet of Things (IoT), AI, and big data are seamlessly integrated with urban living to improve people's quality of life.

These are founded on the concepts of interconnectivity, sustainability, and integrating technology into daily life. That means everything from governance to transportation to infrastructure. Some common examples are real-time traffic management and eco-friendly transport options.

The motivations are the pursuit of environmental sustainability, economic growth, and aspirations to provide people with an elevated standard of living. Some notable examples are The Line in Saudi Arabia, Toyota’s Woven City in Japan, and Net City in China.

In India, the Smart Cities Mission was launched in 2015 to develop 100 smart cities. As of 2024, several cities have made significant progress.

Real estate comes in

With the desire for interconnectivity, sustainability, and integration of technology, this shift is reshaping market expectations and investment strategies in the real estate sector.

Developers are expected to think beyond conventional physical structures. They need to see how technology is integrated with the space and the people occupying it. The Build-to-Rent (BTR) is particularly well-positioned to benefit. Asset owners are looking for smart solutions that address changes like hybrid work and increased electric vehicle adoption. The real estate sector should see this evolution as an opportunity to create urban spaces prioritising sustainability and modern lifestyles.

Smart real estate development can have some added benefits:

• Smart features can enhance a property's desirability. That can result in increased market value.
• Since one of the tenets is sustainability, eco-friendly designs and features will appeal to the growing demographic of environmentally conscious buyers.
• As more people move to smart cities, companies will follow. There will be a huge demand for office and co-working spaces. Companies and developers could have their hands full.

The Indian government is betting on Industrial Smart cities to boost India's manufacturing prowess. They've announced 12 across 10 states with an investment of ?28,602 crore. Real estate experts foresee a 10-15% uptick in demand in these towns over the next few years.

According to Vishal Raheja, Founder of InvestoXpert.com, over 5 lakh direct employment opportunities could be generated. The requirements of residential and commercial real estate will see a big leap. Previous smart city projects have boosted the local real estate landscape. Karnataka's Hubbali and Belagavi smart cities pushed property prices upwards.

Implementation will be key

It's widely understood that unless smart cities realise their full potential, the real estate sector won't see much of an impact. They also need to be executed in a timely fashion without repeated delays.

But there's a pertinent question to be asked - are these smart cities merely spaces for the wealthy and upwardly mobile? That's going to be key since several countries, including India, face the problem of affordable housing. It's something the real estate sector will also have to think about since they're expected to contribute more towards future economic growth.