New city strategies needed to harness investment, urges ULI's Clark

European cities need to develop new strategies if they are to seize the advantages of the twin trends of urbanisation and densification, according to Greg Clark, senior fellow at ULI Europe.

Speaking during a presentation at the Provada real estate fair in Amsterdam on Thursday, Clark noted that cities across the world are adjusting to new economic realities and that they need to adapt their business strategies and investor propositions as part of new economic agendas with revised sector and trade-based growth and investment strategies. The business and investment climate is an increasingly important tool for economic development, new job creation and capital attraction, he added. ‘Cities have become emerging markets for businesses, not just in Europe, but all over the world.’

Pointing to a recent report issued by ULI Europe entitled ‘Business-Friendly and Investment-Ready Cities,’ Clark noted that there is still no precise, widely shared understanding of what ‘business-friendliness’ and ‘investment-readiness’ really mean in a city context. What is clear, however, is that the needs of investors are changing and that new investors are targeting urban development and more capital is pursuing fixed assets than ever before, he said. ‘The combined effect of these and others trends is that there is an imperative to engage in a new way…cities need to understand the financial tools that are open and available to them.’

Significant discrepancies may exist in terms of investment-friendliness at a national and a city level, Clark said. Sweden, Belgium and Austria rank prominently on a country level, but Brussels is more attractive than Stockholm on a city level. Paris and Barcelona rank third and fourth respectively on a city level, whereas France and Spain rank fifth and sixth in the country ranking, he added.

‘Barcelona is a better place to invest in that the nation,’ Clark said.

Cities instead of countries
Investors are turning more to cities than countries, agreed Mark Frequin, director-general for housing and building for the Dutch government. Europe needs to create a new urban agenda, he continued. There is a need for joint efforts and coalition building at a city and regional level, he said.

Pointing to the German university city of Aachen which is located close to the Dutch border, he said that the nearby Dutch city of Heerlen is well-situated to provide student housing to the German city. 'Europe is a network of cities. You also shouldn't look at Amsterdam without looking at the other big cities in the greater Amsterdam region such as Utrecht, The Hague and Rotterdam. I would also include Eindhoven in that list,' he added.

Amsterdam needs to extend its boundaries, said Annius Hoornstra, deputy director of development and urban regeneration for the city. The Dutch capital is currently producing three times the housing stock it has produced in recent years - or between 5,000 and 7,000 new homes annually - but this is still far from enough, he said. 'We see 1,000 people move to Amsterdam each month so the demand for housing is huge. We need to accelerate that production and find new areas for development.'

Amsterdam is the centre of a large and well-connected metropolitan area, he continued. 'The city of Haarlem is only 15 minutes away by train. It's not possible to find a target for all the money coming into the inner city of Amsterdam. We have to create some new and interesting areas outside Amsterdam and get investors interested.'

Boris van der Gijp, director of strategy & research at Dutch institutional investor Syntrus Achmea, called on Dutch cities to show greater flexibility. 'I would like to see a joint vision for the entire Randstad area (or urban agglomeration around Amsterdam, ed.) For example, how many houses do we need, how can we meet the demand for senior housing. Maybe it's time for a joint outlook combined with a joint action plan.'

According to Van der Gijp, local authorities need to step over their pride and use their proximity to Amsterdam as a selling point. 'We need to sell the Netherlands a bit more.'

Holland City
Hans van Rossum, director of area development and city development at the city of Rotterdam, told the audience that Rotterdam is already profiling itself as Holland City together with Amsterdam, Utrecht and The Hague. 'Everybody knows that we all have our own characteristics as cities but we want to look at the bigger region. We shoudn't be in competition, what we want is a coalition of the strong elements, to cooperate and do business with each other.'

Dick van Hal, CEO of Bouwinvest, pointed out that the Randstad urban agglomeration has another unique selling point: ‘It has a green heart. That’s very useful for marketing our urban region.’

Commenting on the example of Greater London, ULI’s Clark pointed out that the UK capital comprised 33 municipalities and 22 million inhabitants including nearby cities such as Cambridge, Oxford, Swindon and Reading. ‘Greater London is a dense metropolitan city with a network of regional cities. We have to get used to the idea London won’t be a mono-centric city in the future.’

Turning to the Netherlands, Clark said that the greater Amsterdam area had the capacity to keep the Netherlands in a prominent place in the global country rankings in the future. ‘The Netherlands has a secret weapon, it has the best infrastructure in the world between the four big cities, it has great connectivity and ease of access, it’s truly an amazing network. It also has one of the best higher education clusters and information technology centres worldwide. That can provide a growth model for the Netherlands.’

Responding to Van der Gijp’s call for greater cooperation at a local government level, Clark noted that it takes time to reform governance. ‘What is needed is a bold and confident message about what these four cities have to offer. They are four centres with their own hubs and overlaps with others. The challenge is to be bold and confident about that message. The world is not used to that idea, but there is absolutely no barrier to the investment community understanding that message.’