The value of a city is formed by the "people" who gather there. In recent years, with the spread of smartphones, the use of "people flow data," which captures people's movements as data, has been rapidly advancing. By analyzing this data, it is now possible to evaluate the value of real estate and plan development based on scientific evidence, which until now has tended to rely on experience and intuition. In this article, INA & Associates, Inc. will explain from the perspective of a real estate expert how the flow of people affects the value of cities and ultimately real estate, and how future urban development and asset building will utilize people flow data. By reading this article, you will gain a new perspective on real estate investment and urban development.
The sense that "that town is vibrant" or "this area looks promising" is actually based on a concrete phenomenon called "flow of people. Where people gather, commerce is born, culture grows, and new value is created. In this chapter, we will explain the basic mechanisms by which people flow shapes the value of a city.
First, people flow data is anonymized location data that shows "when," "where," and "how long" people stay and how they move. It is mainly obtained from the GPS function of smartphones, Wi-Fi, and cell phone base station information. By analyzing this data, the movement of people in a particular area and time period can be understood in detail.
So why is the flow of people directly related to real estate values? This is because the value of real estate is determined by the number of people who want to use the location, in other words, the amount of demand. For example, a location in front of a train station, where many people come and go, is an attractive location for businesses that want to open a store, and renters will come even at high rents. Similarly, areas that are convenient for commuting to work or school are in high demand from people looking for a place to live, and housing prices and rents tend to be high. In other words, the flow of people is an indicator that visualizes the potential demand for a given location.
Traditionally, understanding such demand has relied on statistical data such as census data and long-standing rules of thumb. However, by utilizing human flow data, more real-time and detailed analysis becomes possible. For example, we can specifically measure how a certain redevelopment project has changed the flow of people in a neighborhood and objectively evaluate its effects. This allows us to make more accurate decisions based on scientific evidence.
Human flow data can be used in various aspects of the real estate market. From development planning, to rental management, to brokerage, it provides objective decision-making material in all aspects of the real estate market, thereby enhancing business accuracy. In this chapter, we will delve into specific scenes of utilization and their merits.
One of the most important factors affecting real estate value is location. Among these, "distance from station" has long been considered a universal indicator. However, the value of the same "5-minute walk from the station" property differs greatly if one side of the property passes through a busy shopping street, while the other side passes through a dark street with few pedestrians at night. By utilizing human flow data, it is possible to add the "quality of the street" such as the amount of pedestrians, their attributes (age, gender, etc.), and the time they spend on the street to the evaluation, making it possible to evaluate property values more in line with the actual situation.
Human flow analysis is indispensable when planning the opening of new commercial facilities. It is possible to identify areas frequented by target customers and select the optimal location for opening a new store. In addition, by analyzing the flow of people around existing stores, it is possible to discover relationships with competitors and areas for improvement in order to attract customers.
Human flow data also plays an important role in condominium development. For example, by analyzing where residents of an area go on their days off, it is possible to understand the lifestyles and potential needs of the area. Based on the results, development plans with higher added value, such as the design of common facilities and coordination with surrounding facilities, can be formulated.
| Usage Scenes | Specific utilization | Benefits |
|---|---|---|
| Urban development and redevelopment | Measure and compare changes in human flow before and after development, and objectively evaluate project effects. | Verify the validity of plans and improve persuasiveness to investors |
| Store opening plans for commercial facilities | Identify areas frequented by target customers and select optimal candidate sites for store openings. | Improve accuracy of sales forecasts, avoid mismatches |
| Condominium development | Analyze residents' behavior patterns and identify potential needs. | Design properties with high customer satisfaction and optimize sales strategies |
| Real estate value assessment | Quantitatively evaluate the "quality" of a location by analyzing the quantity and attributes of pedestrians. | Calculate objective property values more in line with actual conditions |
| Rental Management | Monitor changes in human flow in the surrounding area and determine appropriate rent prices. | Reduce vacancy risk and maximize income |
In recent years, the concept of "walkable cities" has been attracting attention worldwide. This is an urban strategy that aims to create a city with not only well-developed sidewalks, but also a city where walking itself is enjoyable and attractive. Creating "walkable cities" not only improves the health of residents and revitalizes communities, but also has the potential to significantly increase real estate values.
A "walkable city" is not the same as a "town where people want to walk. While a "walkable town" pursues physical safety and comfort, such as barrier-free access, a "walkable town" emphasizes elements that appeal to people's senses and feelings, such as beautiful scenery, attractive stores, lush parks, and plazas where people can meet by chance. Towns where people feel compelled to walk naturally encourage people to stay longer and increase their consumption activities. As a result, the commercial value of the area increases, leading to higher land and real estate prices.
| Characteristics | Walkable | Walk-appealing |
|---|---|---|
| Objective | Ensure safe and comfortable transportation | Creating enjoyment of walking and attractiveness of staying in the city |
| Main elements | Widening of sidewalks, barrier-free access, elimination of steps | Beautiful streetscape, attractive stores, green space, plaza, art |
| Impact on real estate | Maintain value by improving basic convenience | Enhancement of area brand and value of both commercial and residential properties |
Promoting walkable cities also contributes to a sustainable society. Reducing dependence on automobiles and encouraging people to walk and use public transportation can be expected to reduce CO2 emissions and improve the health of residents. Such environmental performance and health considerations are important added value in today's real estate market and are essential for maintaining and improving long-term asset values.
Large-scale redevelopment is a powerful engine that can dramatically transform a city and create a new "flow of people. The attraction of a city is dramatically enhanced by the renewal of aging buildings and the construction of state-of-the-art commercial facilities, offices, and condominium towers. This will attract people who previously had no connection to the area, creating a new flow of people.
Successful redevelopment is closely linked to improved transportation accessibility. Access to the area will be greatly improved by renewing the transportation infrastructure, including the development of a station plaza, the opening of a new station, and the construction of new bus routes. This will make it possible to attract people from a wider area and increase the number of people interacting with the entire area. This increase in population will stimulate commercial activity and residential demand, thereby boosting real estate values.
In addition, redevelopment has a positive impact not only on the area itself, but also on the surrounding neighborhoods and the entire rail line. For example, if the redevelopment of a certain station creates an attractive commercial facility, it can be expected to have a ripple effect by increasing convenience for people living along the station and increasing the popularity of the entire rail line as a residential area. In this way, a single redevelopment project can serve as a catalyst to increase real estate values over a wide area.
| Impact Factor | Description | Effect on real estate value |
|---|---|---|
| Concentration of commercial and business functions | Construction of large-scale commercial facilities and office buildings | Creation of demand by improving the attractiveness of the area and increasing the number of workers and visitors to the area |
| Upgrading of residential functions | Supply of high quality housing such as tower condominiums | Inflow of new residents and enhancement of brand image |
| Improvement of transportation infrastructure | Expansion of station plaza, opening of new station, improvement of road network | Enhancement of accessibility to attract customers from a wider area |
| Creation of public space | Development of parks, plazas, and pedestrian streets | Provide a place for local relaxation, improve circulation, and enhance the comfort of the area |
Successful real estate investment depends on how to identify areas with potential. Human flow data is a powerful weapon for this purpose. It enables objective data-based analysis of information that has been earned by professional investors through years of experience and legwork.
In investment decisions, human flow data can be used in two main aspects. One is "understanding the current situation" and the other is "predicting the future. First, by comparing the flow of people between weekdays and holidays, and between daytime and nighttime in an area under consideration for investment, it is possible to accurately grasp the characteristics of that area (whether it is a business, residential, or downtown area). In addition, by analyzing the demographics of visitors (age, place of residence, place of work, etc.), it is possible to determine the type of people who live in the area, and to clarify the tenants and tenants to be targeted.
Furthermore, by analyzing historical data on human flow, it is possible to predict the growth and future potential of an area. For example, an area with a continuous increase in the inflow of young people can be judged to have a high potential for future housing demand. Conversely, an area with a continuous outflow of population requires careful judgment. In this way, human flow data can dramatically improve the accuracy of profitability projections and risk assessments in real estate investment.
We at INA & Associates, Inc. combine such state-of-the-art technology with the real estate expertise we have cultivated over the years to provide the best investment strategies for each and every one of our clients. By combining objective data-based analysis with our professional expertise, we strongly support our clients in building their valuable assets.
In this article, we have explained how the flow ofpeople shapes the value of a city and has a significant impact on real estate values from the new perspective of human flow data.
In the past, real estate values were mostly based on static information such as location and age. However, with the evolution of technology, we are now able to capture and analyze dynamic information such as "human movement. This allows us to evaluate the value of real estate more multilaterally and accurately, and to predict future potential.
Creating attractive neighborhoods that people want to walk through, such as walkable cities, is an important theme for future urban development. In addition, the new flows of people created by redevelopment have the potential to dramatically increase the value of an entire area. Accurately capturing these trends through human flow data will be the key to the future of the real estate business and wise asset building.
INA&Associates, Inc. will continue to sincerely deal with the asset formation of each and every client with "human resources" and "technology" at the core of our management. Please feel free to contact us for any real estate-related inquiries you may have. We will provide the best solution based on our data and experience.