7
april
2014
infrastructure
investor
NEWS ANALYSIS
The quality of infrastructure –
ranging from transportation to
utilities to telecommunications
– tops the list of factors that can
influence decisions regarding
real estate investment and devel-
opment, a study by the non-profit
Urban Land Institute (ULI) and
advisory firm EY has found.
Of the more than 400 public
sector officials and senior-level real
estate executives surveyed for the
study conducted in January this
year, “88 percent rated infrastruc-
ture quality as the top influencer
of real estate investment and devel-
opment,” ULI said in a statement
announcing the study’s findings.
Strong telecommunications
systems, roads, bridges and afford-
able and reliable energy were the
leading infrastructure categories
considered to drive real estate
investment decisions.
NEED FOR ‘CLOSE
COORDINATION’
“The survey findings highlight the
critical role infrastructure plays in
guiding real estate activity and eco-
nomic development, and reinforce
the need for close coordination
between land use planning and
infrastructure planning,” said ULI
chief executive Patrick L. Phillips.
“We have entered a new era that
requires new approaches to fund-
ing and building infrastructure to
support the creation of communi-
ties that are healthier, more liveable,
economically prosperous, and envi-
ronmentally sustainable,” he said.
Infrastructure and real estate development are more closely linked than may previously
have been imagined.
Kalliope Gourntis
reports on the findings of a new survey
The real estate ‘influencer’
s u r v e y
“We have
entered a new
era that requires
new approaches
to funding and
building
infrastructure”
0% 20% 40% 60% 80% 100%
Quality of infrastructure (transportation, telecommunications, etc.)
Consumer demand
Availability of a skilled workforce
Regulations that encourage or discourage development
Tax structure (development incentives, ongoing tax burden)
Quality of government (transparency, accountability, service delivery)
Quality of schools
Availability of recreation and cultural attractions
88%
91%
86%
83%
78%
90%
77%
89%
64%
74%
70%
77%
54%
52%
56%
58%
62%
55%
60%
53%
68%
63%
74%
52%
Public
Private
All
Respondents were also asked
to rate the quality of infrastruc-
ture and investment priority. The
findings showed an inverse corre-
lation between the two, meaning
the higher the quality ranking of
an infrastructure sub-sector, the
lower it ranked on the priority list
for investment.
Public transit was deemed a
top investment priority with only
48 percent of respondents ranking
public transit as “good” or “very
good”. Next on the list of priori-
ties were roads and bridges, fol-
lowed by pedestrian facilities.
As for funding, 75 percent
of respondents identified coop-
eration between developers and
local governments as the most
significant factor in funding new
infrastructure.
“All funding strategies offered
in the survey – including contribu-
tions from federal and state govern-
ments – received relatively strong
responses, suggesting the need for
a range of funding options,” ULI
said in the statement.
ULI and EY surveyed 241
public sector officials and 202
real estate executives including
developers, investors, lenders, and
advisors based in large and mid-
sized cities around the world, with
most based in the US, Europe and
Asia-Pacific.
The findings are included
in the report
Infrastructure
2014: Shaping the Competitive City
,
released this week at ULI’s 2014
spring meeting in Vancouver, Brit-
ish Columbia.
Founded in 1936 and head-
quartered in Washington DC,
ULI is a non-profit education
and research organisation whose
mission is to provide leadership in
the responsible use of land and in
creating and sustaining thriving
communities worldwide.
Global consulting firm EY spe-
cialises in assurance, tax, transac-
tion and advisory services.
n
DRIVERS OF REAL ESTATE INVESTMENTS
Percentage saying “A top consideration” or “Very important”
Source
: Urban Land Institute, EY
