The quality of infrastructure systems - including transportation, utilities and telecommunications - is the top factor influencing real estate investment and development decisions in cities around the world, according to a survey conducted by the Urban Land Institute and EY.
The survey, conducted in January, reflects the opinions of 241 public-sector officials and 202 senior-level real estate executives based in large and midsized cities around the globe, with concentrations in the United States, Europe and Asia Pacific.
Infrastructure quality had the most influence on real estate investment and development, according to 88 percent of those surveyed.
Demographic forces, including consumer demand and workforce skills, ranked as other top considerations determining real estate investment locations.
Infrastructure quality was rated as the highest influencer by public leaders (91 percent) and second highest by private leaders (86 percent).
Consumer demand was viewed as the top factor by the private sector (90 percent).
Other key findings from the survey:
- Public transit led the list of infrastructure investment priorities. Seventy-eight percent of survey respondents said public transit systems, including bus and rail, should receive top priority for infrastructure improvements, followed by roads and bridges (71 percent) and pedestrian facilities (63 percent).
- Investment priority rankings tended to be the inverse of quality perceptions, with only 48 percent of survey respondents ranking public transit as "good" or "very good" in quality, and 51 percent saying sidewalks and pedestrian facilities were good or very good.
- Roads and bridges received modest quality marks, with 60 percent of respondents rating them good or very good. By contrast, 90 percent of respondents said health care facilities were good or very good, placing these facilities at the top of the quality list.