Smartcities. A necessity. Not a marketing ploy

The world’s urban population will double to 6.4 billion by 2050. Cities are being created, abandoned, and transformed faster every year. This poses challenges crucial to the regulation, operation, and sustainability of urban growth and development. What are some of the questions that we must address when dealing with these challenges? How will our response change our world? Here are some topics recently addressed at the recent IFMA "ReTh!nk the City" symposium... great food for thought!

• With workplace mobility and the ability to create virtual workplaces, why do we still need cities? Why do knowledge workers continue to flock to them?
• What lessons can be learned from planned and unplanned (market-driven) cities? How does planning or its absence affect workplace facilities?
• What role will digital “Smart Cities” play in the future, and what kind of social, economic, and environmental information do planners use to shape such cities?
• Should we save dying cities?
• What are the social, financial, and environmental lessons from the new cities being built in developing countries such as India and China?
• What are the facility management implications of the various urban-development models the panelists will present?
• What can the discipline of facility management teach planners about cradle-to-cradle systems, and vice versa?
• Does the urban planning community see facility managers as having a role beyond the day-to-day operations of buildings?
• What role are facility managers already playing in city planning?
• Which of the 11 core competencies of facility management come into play in city planning?
• How can we ensure that facility management needs are taken into account when policymakers make rules shaping urban development?
• What federal, state, and local urban development laws affect facility managers? Where would our insights be useful in shaping new laws and regulations?
• Who is responsible for activating facility managers as participants in the international planning conversation?

From the Experts: Top 10 Real Estate Issues

The Counselors of Real Estate (CRE) recently identified common cross-industry issues that are impacting real estate executives. These issues cover shifting demographics, capital markets, new uses of technology, and the role of sustainability.  My interpretation of the results are below:

• Demographics: An aging population will have an impact on demand for real estate, however millions of new pensioners will push fund managers to focus on asset allocation decisions on stable asset classes, including real estate. On the other hand, the redirection of public funds to retirement systems will challenge the ability to provide basic services and infrastructure.
• Capital Markets and Finance: Liquidity leads the list of concerns. Indeed, access to capital is causing uncertainty in many industries. Specifically for real estate, the capital "hangover" from previous over-allocations will continue to limit capital for some time into the future. That being said, there is a spark of hope as cash-strapped state and local governments create development opportunities by leveraging their hard assets through Public-Private Partnerships. The dynamics of political gridlock and global economic crises, paired with civil discord in pockets around the world are also concerning for future fundraising efforts.
• Technology: the increased use of technology in process automation and alternative workplace strategies is shrinking the need for industrial and office space. Meanwhile, the internet is turning traditional "brick and mortar" stores into Amazon.com showrooms, as shoppers turn to web-shopping rather than cash-and carry approach, resulting in less demand for retail space.
• Sustainability is well-integrated through global enterprise. From corporate governance and management to reporting systems and supply chains, executives are building sustainability into the fabric of their organizations. Real estate is still and will continue to be the primary focus in many corporations' sustainability strategies.

Real Estate Boom in Libya: understanding the legal environment

Less than a year removed from the bloody revolution that toppled Gaddafi, Libya is facing an economic boom. Many people may recall the surge of business activities that began to occur in the mid 2000's as the country started to open up to outsiders. Then a short period of stagnation followed by the Arab Spring and a revolution that freed the country from decades of heavy-handed rule by Colonel Gaddafi.  Now, Libya's natural resources are acting as a catalyst to revive the country from decades of neglect. While many predicted chaos, Libya is mostly peaceful, united and ready to do business. What else is there besides oil to attract businesses? How about over 1,000 miles of Mediterranean coastline, some of the best preserved Roman ruins outside of Rome and the appeal of the vast Sahara desert with many well-preserved Berber villages and oasis towns. Libya is also a young country with around 30% of its population under the age of 15 years. Tourism had started to take off in the last few years of Gaddafi's regime but many of the large development projects were suspended. It is unclear at the moment whether any of these planned developments can continue, but many investors are hopeful that the  government will enable future development with a friendly business environment and public investment dollars.

Working in the legal system. Libya's legal system is reasonably well-developed and includes detailed laws, which are largely derived from the French and Egyptian Civil Codes. Shari'a law is very rarely invoked in commercial matters but does apply to prohibit gambling and alcohol. The prohibition on alcohol may be removed by an elected government but, in any case, need not be a major issue for investors. Consider the success of resort and hotel developments in Saudi Arabia.

Owning Real Estate. Previously, the ownership of real estate by Libyan nationals was restricted and, under Gaddafi's rule, non-nationals were prohibited from owning any real estate. Prior to Gaddafi, land ownership in Libya was open to all nationalities without restriction on size or location. Therefore, it is widely expected that the coming years will see considerable evolution in the real estate market, an asset class strongly regarded in the Arab world in particular. Buyers of other Arab nationalities are already acquiring prime land in Libya and real estate prices are increasing.

Application of Shari'a law. It remains to be seen whether Shari'a law will become more applicable to the commercial laws of Libya. For example, interest is now acceptable where the payment is between two companies. This is in contrast to Saudi Arabian laws, where interest is wholly forbidden. Therefore, at present any provisions in development agreements relating to interest should be considered valid and, if this changes in the future, there are ways that such agreements could be drafted to get around any enforcement issues. The exclusion of liability may also be an area of law, which could change if Shari'a principles were applied strictly. Shari'a principles prohibit the exclusion of liability on the basis that a person is responsible for their actions. Previously in Libya, exclusion of liability arising from 'ordinary' defaults could be excluded but liability for fraud or 'gross' negligence could not be excluded. In a commercial context, if either of the above issues proves to be a material roadblock for a particular deal, the governing law of the contract that the parties opt for may be something other than the laws of Libya.

Overall, the legal system of Libya is sufficient for investors to enter the market with a relative level of comfort; and the boom of the Libyan real estate market should reward those who move quickly to secure deals with the right partners.