Beyond bricks and mortar: Reconnecting real estate with place

Real estate has long claimed to be about location. Yet too often, “location” is reduced to land value and yield. In doing so, the industry has delivered striking skylines and rising asset prices, but also development that can feel detached from the communities it inhabits. The reality is real estate does not create value on its own; people do.

A tale of two regenerations

London Docklands and Salford Quays – contrasted in The Local and Regional Economic Development Handbook – illustrate the point. Both began with derelict land and weak infrastructure. Both attracted capital and transformed their physical environments.

Docklands became a global financial centre, but much of that prosperity bypassed local communities. Housing became unaffordable for many existing residents, and many jobs sat behind skills mismatches. Salford Quays took a more integrated approach, linking development to employment pathways and combining commercial growth with mixed housing. It has its own affordability pressures, but it shows that regeneration can be designed to connect rather than divide.

The property value paradox

These examples highlight a deeper issue: real estate’s reliance on property value as the primary measure of success.

Rising values are typically read as evidence of demand and growth, yet the same forces that drive financial returns – higher rents, capital appreciation – can displace residents and small businesses, reshaping local social fabric.

This is not an argument against regeneration. Investment in land and property remains essential. The issue is not whether development occurs, but how it is conceived and delivered.

Rediscovering the power of place

At the heart of this challenge is place. Place is more than the built environment – it includes identity, connectivity, opportunity and quality of life. It attracts talent, supports innovation and underpins long-term resilience. Crucially, it cannot be manufactured through buildings alone.

Infrastructure enables access to jobs, markets and services. Real estate provides space for economic and social life. But it is people, their skills, relationships and behaviours, who determine whether a place thrives.

When these elements are aligned, development can generate broad-based prosperity. When they are not, even strong physical investment may fail to deliver lasting value.

From property-led to place-led

There has been a gradual shift from purely property-led regeneration towards more integrated approaches.

This reflects growing recognition that economic, social and environmental outcomes are interconnected. Successful developments increasingly embed this thinking from the outset, rather than treating social impact as secondary.

In practice, this means infrastructure that connects communities to opportunity, housing that reflects a range of incomes, and strategies aligned with local skills and industries. It also requires greater attention to public space – shaping environments that support everyday life rather than simply enhancing asset values.

Place-led must also mean low-carbon-led

The built environment accounts for roughly 40% of UK carbon emissions, and the retrofit of existing stock is now arguably the central technical challenge facing the industry.

Demolition and rebuild are no longer the environmentally – or increasingly the financially – defensible default. Buildings unable to meet evolving energy efficiency standards face the prospect of becoming stranded assets, while those designed without regard to whole-life carbon, climate resilience or operational flexibility may find their value eroded faster than depreciation schedules anticipate.

A genuinely place-led approach embeds this from inception rather than treating it as compliance. That means prioritising adaptive reuse over demolition, planning estate-wide energy and heat strategies rather than building-by-building fixes, and designing for overheating, flooding and infrastructure stress as core requirements. Progress is held back as much by capacity – skills, supply chains, financing structures – as by capital, and addressing those constraints is itself an economic development task.

Rethinking risk and return

For investors and developers, this is not just social responsibility – it is increasingly commercial logic.

A further lesson from past regeneration is the cost of inflexibility. Many schemes were conceived around a single dominant use – office-led, retail-led, or built around an assumed pattern of demand that has not survived contact with the last decade. Hybrid working, structural change in retail, shifts in consumer behaviour and the energy transition have all exposed assets, and in some cases whole districts, that cannot easily adapt. The financial models, lease structures and physical specifications that once underpinned investor confidence are now, in places, the very things that prevent reinvention.

Future-fit places need to be designed for change. That means flexible building specifications, mixed-use plans that can absorb shifting demand, governance with the agility to respond, and financial models that price in optionality. The most resilient real estate of the next two decades will not necessarily be that with the highest day-one yield, but that which can be repurposed, decarbonised and reconfigured at the lowest cost as conditions evolve.

Measuring what really matters

One barrier to progress is measurement. Traditional metrics such as Gross Value Added, job creation and property values are useful indicators of economic activity, but say little about who benefits. They do not reveal whether residents access opportunity, whether housing is affordable, or whether communities are becoming more cohesive.

A more balanced approach is needed – one that considers economic outputs alongside social outcomes and long-term sustainability. This does not mean replacing financial metrics, but complementing them with a broader understanding of value.

Building for shared prosperity

Real estate will continue to shape cities and regions, and the scale of investment ensures its impact, positive or negative, will be significant. The question is whether the industry can move beyond a narrow focus on assets and returns towards a more holistic view of development.

The lessons from past regeneration are clear: physical transformation alone is not enough. Without connection – to people, opportunity and place – development risks creating islands of prosperity within wider exclusion.

The most successful future projects will recognise this. They will be grounded in a clear vision of place, supported by integrated infrastructure, designed for adaptability and the climate transition, and shaped with an understanding of how people live and work. They will balance commercial viability with social inclusion, and short-term returns with long-term resilience.

Dr Glenn Athey is author of The Local and Regional Economic Development Handbook.

The Local and Regional Economic Development Handbook is full of practical reflections and implications like this across all the functions of economic development, including enterprise, innovation, skills, investment, and sustainability.