Real Assets provides a great opportunity around the intersection where real estate meets infrastructure. This conjecture is played out through the 219 publicly traded REITs representing over $1.3tn that clearly recognise the potential, but to optimise this we need to bring connected thinking in a way that coalesces together public and private strategy, finance and innovation that equally delivers to the community by guaranteeing wider social and economic benefits.
With the 'build back better' mantra becoming increasingly engrained, we have a unique opportunity now to look at these intersections and the opportunities they provide for a new dawn of regeneration where this category includes: railway stations that are becoming major leisure/shopping centres; airports that are often the key focus of their region; ports that are increasingly combining wider apron development for manufacturing and distribution, etc. The potential to look beyond the single asset but more broadly into the wider regenerative benefits that can be realised when great minds, organisations and finance come together will be huge as we remerge post pandemic.
Certainly, the last eighteen months has seen the real assets sector as a game of two halves. Our airports, stations, offices and shops have been decimated in terms of traffic, whilst industrial and logistics assets and data centres cannot be built fast enough to cope with the changes in preferences. The impact for infrastructure and real estate has been significant, but the impact can only serve to help to shape lasting change to evolve and enhance the immediacy of the opportunity to drive out cost and increase value through building back better.
What investors want is increased confidence and return on investment, and that is what infrastructure assets can deliver as the lifespan tends to be decades longer that real estate. But combine the two in a holistic way and the ripple effect manifests at all levels. Investors looking for high yield investments seek opportunities to diversify their approach, with infrastructure, by definition, providing a highly transferable asset that offers that security thanks to the underlying physical nature.
Personally, I am excited that we have some great blueprints that have emerged around our stations that create not only huge value and impact, but still serve as one of the most critical infrastructures for the effective functioning of our cities. As we move towards a more sustainable future, there will be an increasing reliance on public transport, reinforced by the greater connectivity and investment of national schemes such as HS2. All of this, combined with the increasing expectations regarding the customer experience, means that the first mile-last mile journey is ever more important and will have a large impact to the uptake of public travel and local economic growth around these key station infrastructure hubs in particular as we return to our new normal. There have been some great developments happening at our stations already, in particular Kings Cross London of course, but also there are others like Birmingham New Street, London Bridge, Manchester Victoria, Edinburgh Waverley, and Bristol Temple Meads all of which are undergoing a renaissance in terms of the fundaments of bringing new thinking in retail, leisure, recreation, health, communications, homes and commercial with a sense of place that means they are accessible for the whole community.
The key now is how we can, with confidence, think beyond the conventional to bring new potential and drive fresh thinking to our stations to create an even more vibrant station quarter. By capturing the rising property values from the synergies of good placemaking, public investment can be funded by commercial gain through such mechanisms as business rate supplements, joint venture partnering or direct developer contributions.
Our role, as strategic advisors, is to help realise the potential by creating visionary masterplans and bringing the best parties together with the aim of generating additional revenue and economic advantage. Providing truly strategic and innovative thinking about intelligent infrastructure, considering the potential of digital and data, alongside the physical asset, whilst enhancing the people experience transforms great ideas into real opportunity. By connecting, collaborating and convening organisations to solve the potential around the intersection for real assets we can deliver real and lasting impact, whilst also materially affecting the development value potential on adjacency of real estate.
But to do this we need to be more collaborative, joined up, agile and innovative firstly in our approach blending the best of public and private thinking through planning, financing, design, build and operation; and secondly by convening commercial opportunity with private sector developers alongside local authorities and other public sector bodies, it is possible to attract not only more private sector investment but also delivering private sector financing through the freeing up of previously operational land to unlock much-needed development.
Unlocking the potential through the development of stations and surrounding land delivers clear benefits to passengers, businesses and local communities, which in turn can help to unlock the delivery of homes, attracting new businesses, creating jobs, enhancing placemaking and helping stimulate the wider regeneration of our city and town centres delivering wider economic development potential and economic growth.
As we head back to the office, what is clear is our stations have a critical role to play both now and for the future.
About the author
Amanda Clack Dr. (hc) MSc BSc PPRICS FRICS FICE FAPM FRSA FIC CCMI CMC is an Executive Director at CBRE, the worlds largest real estate adviser, where she is Head of Strategic Advisory, a member of the UK Board, and Chair of the Strategy Board. She works across the business with public and private sector clients to deliver major strategic consultancy projects that deliver business transformation through the built environment. Amanda is the Past Global President for the Royal Institution of Chartered Surveyors (RICS) becoming the longest-serving in 123 years and was announced in 2019 as the most ‘influential’ surveyor of all time. Amanda was a Partner in two of the Big Four; most recently EY LLP, where she was the Head of Infrastructure (Advisory) and, prior to that, PwC where she led the consulting business across the South East of England with mid-market FTSE250 companies. She has over 34 years of extensive board-level experience gained on strategic assignments. In addition, Amanda is a Trustee and Chair (Designate) of the Board of the University College of Estate Management She is also on the Development Board of the London Symphony Orchestra. Amanda is also listed in Who’s Who and co-authored two books on Diversity and Inclusion in Real Estate and Construction.