The shock caused by the pandemic undoubtedly had an effect on the scenarios in the real estate industry, bringing changes. The coronavirus and the lockdowns drove the public to adopting means of consumption based on the internet, and the consequences were quick to appear, with the contraction of investment in stores and shopping areas in 2020-2021, a fall only partially won back during the past six months. This phenomenon has, however, been counterbalanced by a logistics boom, which as never before has taken a central role in the strategies of operators in the large-scale retail trade, who have strengthened their e-commerce divisions.

In short, there are complex dynamics at work; and however much recent events may have had a significant impact, there are also certain well-known long-term trends that have further consolidated.

Analysts say that this country’s falling birth rate will lead to decreasing volumes: the quality of new construction will prevail over the quantity. With the move of the western countries towards a knowledge economy and the massive use of the internet, deindustrialisation and teleworking will continue to remould the urban scene, freeing up large factory buildings previously used for industrial purposes or offices. We have reached the point where several activities, ranging from engineering to customer care, marketing and certain types of consultancy, can be carried out by remote means. Lastly, an increased awareness of climatic issues and technological progress are acting as additional, powerful drivers of change.

Let’s look at some of the changes in more detail.

The number of logistics hubs is increasing

The growth in electronic commerce has generated a rising demand for logistic hubs which, together with the spreading of premium services (same-day delivery), are moving increasingly closer to urban areas. According to Nomisma, a market research company, investments of approximately 3 billion euro (+90%) were made in the period 2019-2021.

The Piacenza area has always been at the heart of delivery flow in northern Italy: but factory space can take on interesting values in the suburbs of all larger towns and cities if they are well-connected to the main lines of communication.

NMoreover, a certain number of new retail trends have been taking place in urban centres. Amongst the most recent has been the increase in services offering spending with rapid delivery (“dark stores”): a restricted number of products, available immediately, ordered online and delivered by riders who cover a limited area. Or “dark kitchens”, restaurants without tables that prepare meals for a public which orders via apps and eats at home: both methods can lead to gains in value even in those areas with lower appeal from a commercial standpoint because they are far from high-transit zones.

Hydroponics and vertical farming

Awareness of climate change has stimulated the search for new farming solutions that call for less water and fewer other resources.

That is the case of hydroponic farming. A technique which, in reality, can boast ancient roots; retrieved from the start of the middle of last century, it is currently experiencing a new youth, also because it can be made easier by resorting to technological solutions. According to data produced by PitchBook, a market analysis company, the sector is growing by 25% a year, with global turnover now exceeding 4 billion dollars.

So how does it work? In brief, you don’t need farmland: a plant’s roots are sprayed with nutrients dissolved in an aqueous solution. The result obtained is comparable to traditional growth.

As to flavour, it all depends on the right combination of nutrients and oxygen: and it is here that the farmer can be supported by technology used to calculate the right dosage.

The big advantage is the possibility to farm anywhere, also on brownfield sites which are used as vertical farms. But there is more to it: less water is used, the resort to weed-killers and pesticides is reduced and it is also possible to have fruit and vegetables on your doorstep in the city, thereby lowering transport costs and emissions.

In this case too, thanks to hydroponics, the value of areas previously difficult to place on the market can be enhanced. Among the most advanced countries is Holland, where it is put to considerable use in enormous greenhouses.

The rise in data centres

The development of the cloud and applications using top-level technology which requires little down time has led to the need to build network hubs that are becoming increasingly closer to urban centres, in areas if possible rich in water. Data centres are essential for the society of the future and vast areas on the edge of large towns and cities are needed to host them. According to the latest report issued by Cushman & Wakefield, deals involving 750,000 square metres having a value of 650 million euro were recorded between 2013 and 2021. Leading the list of the most coveted destinations is Milan.

Vertiports and drones

The increasing use of drones has led the legislator to develop a series of extremely detailed regulations. The latest of these (going back to May 2022) bears the signature of the European Union Aviation Safety Agency (EASA) and regards vertiports, structures that enable the vertical landing of drones but also – in the future – that of air taxis.

This is the first document issued in the world in this respect, and thanks to its binding restrictions it provides guidelines to enable administrators, designers and players in the real estate industry to understand a part of the industry’s future. In order to build a vertiport, defined as ‘an area of land, water, or structure used or intended to be used for the landing and take-off of VTOL-capable aircraft’, a conical obstacle limitation surface is required. It is therefore easy to understand why it is legitimate to expect that changes will occur in the value of the areas potentially involved. The European definition is deliberately broad to avoid restricting the market potential of the drone industry. According to the Drones Observatory of Milan Polytechnic, 85% of companies foresee a significant rise in the sector within three years, while 80% of people believe it is useful for the transport of goods. The transport of persons holds less charm: only 7% of people would currently board an autonomous unmanned drone.

The future of real estate: illimity’s 23 June event

Urban regeneration, entrepreneurship, finance and innovation are the subjects that will be tackled on 23 June at Believe – Giving Credit to the future, an event organised by illimity at the Officine del Volo in Milan. But above all the talk will be about strategies to reduce the impact of the crises that are following us hard and fast. And, if possible, to find opportunities on the horizon.

Thought up during the pandemic, Believe has been conceived with one single objective in mind: to stimulate profitable dialogue, not always easy, between businesses and the finance world. An exchange of views that must start out from mutual trust, putting the search for solutions to modernise the country and create wellbeing and growth at the heart of the matter.

After an introduction by illimity’s chief financial officer, Corrado Passera, and an overview of the geopolitical situation, it will be left to the managers of neprix and the businessmen who have played a key role in success stories in the field of urban regeneration to talk about their experiences, with Mia Ceran acting as moderator.

An analysis of the macrotrends in the sector will be presented by McKinsey, who will extend the perspective to the international scene and the opportunities that innovative business models are able to provide.

There are 27 speakers on the programme who will rotate across 4 round tables (detailed information can be found here). Entry to Believe is free of charge, but you will firstly need to register on the event’s website.

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