Sustainable Cities and Better Climate: What’s the Impact on Investment Returns?
Schroders, 1 London Wall Place, London. EC2, 11 September 2019

Living for the city

Cities are home to an ever growing share of the world’s population. They are also facing dramatic upheavals as a result of technological disruption, demographic shifts and climate change, as Joanna Turner, Head of Property Research, Canada Life Investments noted in her introduction to this seminar.  The speakers at the meeting investigated what makes some cities more sustainable than others over the long term and some potentially more successful from an investment perspective.

For Professor Yolande Barnes, Chair, The Bartlett Real Estate Institute, UCL, the city of the future could have much in common with the earliest cities, dating back to the agrarian age.  These cities will not only need to be much more sustainable in their energy use and transportation systems, but will also play a key role bringing people face-to-face in an age when so much interaction is digital. This may well mean a growing role for smaller cities and towns, in contrast to the recent trend among property investors to focus on global mega-cities.


Looking at what gives cities investment potential, Simon Chinn, Senior Analyst, Grosvenor and Tom Walker, Co-Head of Global Real Estate Securities, Schroders both took a research perspective on measuring the myriad qualities that make some cities work better than others.  As a long-term investor, Grosvenor consider resilience and sustainability to be critical qualities in the context of the 60 plus cities where they hold real estate.  Besides focusing on the physical aspects of sustainability like climate resilience and infrastructure, they now take increasing account of cultural factors such as political stability and the rule of law, which may in turn impact the resilience of the built environment.


Schroders have found that five variables – GDP, retail sales, population, median income and the number of top universities – go furthest in explaining what makes cities successful for property investment.  But Walker emphasised that these measures are increasingly tied to effective infrastructure and climate resilience, factors that can vary hugely from one city to another. And with some experts forecasting that cities will contain more than 90% of the world’s population by the end of the century, they are clearly have a huge potential influence over climate and the wider environment going forward.

Jacqueline Bleicher, Urban Design Director, Global Urban Design stressed the importance of getting communities involved in the development of their cities, as this is the best way of ensuring they will be safe and comfortable places to live and work.  It can also help provide sustainable solutions that will work in the local environment, something that should add value for those developing and investing in real estate.

Tim Horsey