Models of public and private partnership

The creation of communities is the lifeblood of local government. It stems from the desire to develop great places to live and work, to shape cities and their identities. Though this begs the question, can everywhere thrive and what will future cities need?

The post-pandemic world has revealed the need to act. This urgency is tempered with the realisation that sustainable, healthier and responsive cities require significant investment. This is a call to action which has resonated not only in the public sector, but across the private investor community.

Investment vehicles that promote the creation of a better quality of life for our communities are now reaching our urban centers. Investor appetite is changing as the private sector requires opportunities that not only offer return, but carry environmental benefits and long term social purpose.

The financial constraints felt by local and central government has paved a way for collaboration between public and private sector that is now key for future urban center development. Both sectors working together to create a shared vision of connected, sustainable and inclusive spaces: a proactive approach to placemaking. For instance, governments are working closely with infrastructure funds to gain access to technologies and development expertise to oversee the “smart” transformation of the local municipality in areas such as renewables, transport, residential and utilities.

It’s not just about better working arrangements, increased collaboration can mean better returns and de-risk the capital investment. Working with local communities to drive what places need will lead to more accurate funding. But first it’s about getting the basics right: having good local services and transportation that enable development, along with communities that are empowered to shape places and their identity.

The investor community is now part of this journey and is helping to bring the flow of capital investment into our cities and utilize the opportunity. We are moving away from the era of constrained funds and towards newer models that offer investors dependable returns. The criteria have also changed for investors with the increased importance of the ESG agenda. With private and public sectors working together we could potentially see this setting a precedent for future funding - a trend where public sector requirements and private sector demands are met, bringing together land holdings. In order for this to really work, public authorities need to own these plans and collaborate with these stakeholder from the early outset.

Public assets can transform into newer vehicles with the state taking a more corporate view of its assets. Surplus assets coming forward to the market will continue, but there is scope to do more and better pooling of the assets, to have a single conversation on what is needed. Though this is easier said than done, as there are a raft of stakeholders to engage, we can achieve this and move towards the understanding of these assets to regenerate. There is now such variety of spaces in demand: hybrid, core space, flexible space and local hubs. The future will be about working and living in interesting and mixed spaces that are connected and thriving. The mega projects that will come through require long term public commitment. How we achieve that balance is both a challenge and an opportunity.