Infrastructure investment remains a key catalyst for economic growth and real estate investment. Well-maintained roads, bridges, energy grids and data networks enable businesses to operate more efficiently, reduce costs and expand their operations. However, in 2021 the American Society of Civil Engineers (ASCE) highlighted that the United States alone faces an infrastructure investment gap of over $2.5 trillion,18 with deteriorating infrastructure posing a threat to economic growth and real estate development. The ASCE estimates that continued underinvestment, based on the 2021 rate of investment, could cost $10 trillion in GDP by 2039.19 Governments have begun taking steps to address this threat and narrow the funding gap. The United States Congress passed the Infrastructure Investment and Jobs Act20 in 2021 to channel over $1 trillion in federal funds to projects across the country. However, given the size of the gap, increasing costs and other pressures, infrastructure will likely remain underfunded. Addressing these infrastructure challenges, however, could unlock substantial economic value, create jobs, boost GDP and enhance demand for real estate. The relationship between infrastructure and real estate is reciprocal: well-developed, smart and sustainable infrastructure boosts property values and encourages further investment, while robust real estate development stimulates economic growth and the use of revenue-generating infrastructure. This section explores the significance of infrastructure investment as an enabler of real estate investment. Transport infrastructure is one of the most visible and impactful drivers of real estate development and asset value. Efficient transport networks improve access to jobs, services and amenities, enhancing the desirability of real estate assets near transit hubs. Properties located near major transport nodes – such as subway stations, bus rapid transit (BRT) systems and airports – tend to command higher rents and property values due to their superior accessibility. King’s Cross in London offers a helpful playbook for successful transit- oriented urban regeneration. Anchored by the King’s Cross and St. Pancras transit hubs, the former industrial area is now a destination for business, culture and leisure, providing both economic activity and an inclusive mixed-use community. Transport infrastructure also plays a critical role in promoting social equity by connecting underserved communities to economic opportunities. Boston’s transit-oriented development (TOD) in Somerville transformed a neglected industrial area into a vibrant neighbourhood with residential, commercial and recreational spaces by constructing a new subway station. Historically, infrastructure developments have sometimes divided communities or displaced marginalized populations. Cities that invest in multimodal transport systems – including public transit, cycling lanes and pedestrian-friendly streets – can reduce spatial inequality by ensuring that all residents, regardless of income or location, have access to jobs, education and healthcare. By investing in robust transport networks, especially public transport, cities can open up access to more affordable land for housing without relying on models that encourage urban sprawl. This approach enables the development of higher- density housing in suburban or peri-urban areas, which can help alleviate pressure on housing supply and reduce costs for residents. In contrast, urban development that prioritizes private car ownership can lead to increased traffic congestion, higher infrastructure costs, reduced social mobility and a greater environmental footprint. Copenhagen’s Finger Plan, initially developed in 1947 and continuously updated, encourages growth along five “fingers” extending from the city centre, each supported by rail transit and surrounded by green belts. This structure not only prevents urban sprawl but also ensures that residents have easy access to public transport and green space, cultivating both environmental sustainability and economic vibrancy. Investment in airport infrastructure is another vital component of urban competitiveness, particularly as cities vie to attract international business, tourism and talent. Well-connected airports enhance a city’s global reach, cultivating economic growth by facilitating the movement of people and goods across borders. However, as urban expansion encroaches on previously remote airports, managing the environmental and spatial impact of aviation is becoming more complex. Cities such as London and Amsterdam face resistance to airport expansions due to concerns over noise, emissions and land use. Cities consume two-thirds of the world’s energy21 and investments in renewables and smart grid technologies can help cities ensure the delivery of reliable and clean energy. As cities aim to decarbonize buildings and shift towards electrification, investment in grid infrastructure has become increasingly essential. Modernizing the grid While there are a number of enablers for liveable, sustainable, resilient and affordable buildings, and myriad factors that drive rental growth and asset appreciation, this section focuses on three specific areas for value creation: infrastructure investment, people-centric development and technology. 4.1 Real estate and infrastructure $2.5 trillion is needed to close the infrastructure investment gap in the United States. Reimagining Real Estate: A Framework for the Future 34

Reimagining Real Estate 2024