Short answer
When designing for urban development projects in emerging economies, consider the dominant financial drivers which favor commercial, self-contained developments over integrated, mixed-use or residential-focused schemes.
- Field
- Innovation & Design
- Source
- Finance and Society (2024)
- Method
- Qualitative analysis of real estate investment trends and urban development patterns.
- Evidence
- Strong effect
In emerging markets, real estate financialisation tends to focus on high-return commercial developments like office parks and malls, rather than lower-income residential areas, due to a more conservative investment climate. This innovation & design research insight is drawn from a 2024 study published in Finance and Society. Using Qualitative analysis of real estate investment trends and urban development patterns., researchers explored how this design variable affects real-world outcomes. The key design takeaway: When designing for urban development projects in emerging economies, consider the dominant financial drivers which favor commercial, self-contained developments over integrated, mixed-use or residential-focused schemes.
Financialisation prioritizes 'investable' commercial enclaves over residential markets in emerging economies.
In emerging markets, real estate financialisation tends to focus on high-return commercial developments like office parks and malls, rather than lower-income residential areas, due to a more conservative investment climate.
Finance and Society · 2024
Key Findings
- 01Real estate financialisation in South Africa is more conservative than in the global North.
- 02Financialisation shows minimal interest in residential markets, focusing instead on commercial properties.
- 03Key 'investable' spaces include securitised office parks, malls, mixed-use developments, and 'satellite cities'.
- 04South Africa's 'emerging market' status influences a prudent lending regime, shaping investment choices.
Application
Design takeaway
When designing for urban development projects in emerging economies, consider the dominant financial drivers which favor commercial, self-contained developments over integrated, mixed-use or residential-focused schemes.
How to apply
When proposing new urban developments, research the prevailing financialization trends in the region to understand which types of projects are most likely to receive investment and shape the urban fabric.
Project actions
- 01Investigate the economic context of your design project's location.
- 02Consider how financial incentives might shape the types of buildings and spaces that get built.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Provides a specific case study of financialisation in a Global South city.
- +Highlights the conservative nature of real estate investment in emerging markets.
Limitations
This research is specific to Johannesburg and may not apply everywhere. It focuses on financial aspects, not necessarily on user needs or community impact.
Reliability & validity
The study's findings are based on an analysis of financialization processes and urban development in a specific city, making it context-dependent. Its validity relies on the accuracy of the data and interpretation of financial and urban planning trends.
Think critically
How might designers advocate for more socially equitable urban development when faced with strong financial incentives for commercial-only projects?
Design Principles
"Economic drivers significantly influence the scale, type, and location of built environment projects, often prioritizing commercial returns in specific, 'investable' zones."
Understanding these investment patterns is crucial for designers and urban planners. It highlights how economic forces shape the built environment, potentially leading to uneven development and a focus on specific types of spaces that may not serve the broader community's needs.
What This Means for Your Design
In places like Johannesburg, money tends to flow into building big shopping malls and office buildings rather than houses, because investors see them as safer bets.
How to use in your project
- 1.Reference this study when discussing the economic factors influencing your design choices, particularly if your project is in an urban or developing context.
Add to My Project
Quick Cite
Paragraph starter
The financialisation of real estate in emerging markets, as exemplified by Johannesburg, demonstrates a strong tendency to prioritize the development of 'investable' commercial spaces such as office parks and malls over residential projects. This selective investment pattern, influenced by a more conservative lending regime, shapes the urban landscape by favoring self-contained commercial enclaves and potentially impacting the availability and type of housing.
Source
Finance and Society
Real estate financialisation and the production of ‘investable’ spaces in Johannesburg
journal · 2024
View sourceQuestions About This Research
- What does the research say about financialisation prioritizes 'investable' commercial enclaves over residential markets in emerging economies?
- When designing for urban development projects in emerging economies, consider the dominant financial drivers which favor commercial, self-contained developments over integrated, mixed-use or residential-focused schemes. Evidence: Finance and Society (2024).
- Why does "Financialisation prioritizes 'investable' commercial enclaves over residential markets in emerging economies." matter for design?
- Understanding these investment patterns is crucial for designers and urban planners. It highlights how economic forces shape the built environment, potentially leading to uneven development and a focus on specific types of spaces that may not serve the broader community's needs.
- How can designers apply this research?
- When designing for urban development projects in emerging economies, consider the dominant financial drivers which favor commercial, self-contained developments over integrated, mixed-use or residential-focused schemes.
- What were the main findings?
- Real estate financialisation in South Africa is more conservative than in the global North.. Financialisation shows minimal interest in residential markets, focusing instead on commercial properties.. Key 'investable' spaces include securitised office parks, malls, mixed-use developments, and 'satellite cities'.. South Africa's 'emerging market' status influences a prudent lending regime, shaping investment choices.
- What research method was used?
- Qualitative analysis of real estate investment trends and urban development patterns..
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2024 journal from Finance and Society.
- What should I do differently in my next project?
- When proposing new urban developments, research the prevailing financialization trends in the region to understand which types of projects are most likely to receive investment and shape the urban fabric.
- What are the limitations?
- The study focuses on Johannesburg and may not be generalizable to all emerging economies. The analysis is primarily economic, with less emphasis on the social or environmental impacts of these developments.