Developing innovative and viable mechanisms to secure funds for developing smart cities is essential. Strategies to engage multiple stakeholders will be necessary. Finally, smart cities require technology advancements that can support the initiative.
The concept of smart cities seems to offer multiple avenues for investment. Considering the holistic approach that is expected to be adopted in their planning and development, early investors in these projects can look forward to healthy gains in the medium to long term. However, land prices in and around the locations of the proposed project (particularly in case of greenfield locations) would witness a surge. Similarly, in existing cities (proposed to be re-invented as smart cities) investment in locations along planned transportation proposals such as the metro, and peripheral areas (benefitting from physical and technological connectivity) could prove beneficial.
Smart cities would be designed to provide quality services and experience to their residents. Indeed, renewable energy, efficient energy systems, water recycling and purification systems, sewerage and solid waste management systems, smart building systems such as smart meters, etc., would be adopted across these cities. As a result, industries/companies associated with providing such technologies/products can expect an increase in order bookings thereby making them a good investment option as well.
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While the smart city concept has been in existence for a short time and examples of the same can be seen across the globe, its interpretation and implementation have been very subjective. Various city corporations have assessed and prioritised sectors/services that needed attention and incorporation into their grid and have acted accordingly. Some prime examples of these include Seoul in South Korea, Amsterdam in the Netherlands, and Rio de Janeiro in Brazil. These cities have focused on incorporating the "smart concept" while introducing more accessible and transparent governance systems.
In India, the government decision to develop so many smart cities has focused attention on such projects. Not only are existing cities competing with each other to be one of the chosen 100, but developers, too, are incorporating components into their projects to make them "smart". Further, a number of large-scale regional projects such as the Delhi Mumbai Industrial Corridor (DMIC) and Chennai Bangalore Industrial Corridor (CBIC) would encompass many new urban areas and towns and are very likely to announce smart cities as a part of their development plans.
The development of a smart city presents a huge opportunity, particularly from the real estate perspective. The very nature of these smart cities - the provision of information and communications technology services coupled with social facilities - would make them very attractive, in particular to the services sector. Development of technologically superior work spaces, which offer services such as smart work stations, very high speed Internet, etc., at competitive rates, is sure to entice organisations to shift focus to such newer locations. These could also include IT SEZs, proving to be attractive destinations for IT companies.
Smart cities would also see the development of integrated industrial clusters, especially in locations which have a strong industrial presence. These smart industrial parks would be state of the art with steady power supply. They could offer multiple options such as energy-efficient ready built space (standard design factories), multiuse built-up options as well as industrial sheds and plots. Further, these facilities along with office space options could prove beneficial to manufacturing entities as well.
Necessary social amenities such as educational and health care institutions would also necessitate heavy consideration and investments. The diverse nature of Indian cities makes it difficult to adopt a single definition of a smart city. Many cities in India lack collaboration between the citizens and the civic authorities. A smart governance system which connects these two sides would enable the city to offer better services to its citizens - it would in turn encourage them to become more active in the operational aspects of the city. Connecting these two sides to the business aspect would add value to the system and result in a continuous exchange platform creating the right ecosystem for further economic growth.
(The author is Executive Managing Director, South Asia, Cushman & Wakefield)