02. Electric avenue

The restrictions on movement imposed to control the spread of Covid-19 caused mobility levels to plummet – at every geographic scale and right across the world. From long-haul flights to local shopping excursions for food, population movements collapsed. The scale and duration of the changes mean that some of the impacts on our mobility are set to endure long into the future.

Exactly what the new post-Covid era looks like is still unclear. Some of the trends that emerged or were accelerated by the pandemic have receded, while others have persisted. Although office occupancy figures are continuing to trend upward, many employees are still working from home several days a week. Retail foot traffic numbers also remain below their pre-Covid levels, while online retail sales have retained much of the ground claimed during lockdown. Flights and passenger numbers remain well below previous levels; even after restrictions are eased, levels of business travel are expected to be lower as at least some meetings continue to take place virtually1.

In most cases, recovery in levels of mobility should be regarded as a good sign – that things are getting “back to normal”. But from an environmental perspective the last thing we want is a “return to normality”. The slump in travel sent world oil prices tumbling, even briefly falling into negative territory as surplus supply exceeded the storage capacity available. At their low point in March 2020, European car and motorcycle emissions were down 88%; global emissions fell by 7% during 2020 as a direct result of the pandemic2. Cities and national governments are keen to hold on to these windfall climate gains as the recovery progresses.


At their low point in March 2020, European car and motorcycle emissions were down 88%


Global emissions fell by 7% during 2020 as a direct result of the pandemic

Changing lanes

In Paris, some 50 kilometres of temporary bicycle lanes were introduced across the city during 2020 to help provide a Covid-safe alternative to public transport amid the notoriously bad Parisian traffic. Such was their success that the city has made them permanent, adding to the existing 1000 kilometres cycle infrastructure network - with more yet to come. Cycling is now estimated to account for up to 15% of all trips made in the French capital3. In the UK, Birmingham is one of several cities to have introduced a clean air zone (CAZ). This places a tax on cars entering the city centre area based on their emissions, with higher emissions resulting in greater taxation. Introduced in June 2021, Apple mobility data shows the CAZ is already having a visible impact. Public transit and walking trips in Birmingham increased by 56% and 38% respectively in the three months after the CAZ was introduced; driving trips only increased by 12% over the same period4.


Given that buses and trains emit around 100g and 2g of CO₂ per passenger kilometre respectively, compared to around 280g for a small car, the carbon impact is significant. (Active transport, such as walking or cycling, produces no direct emissions – not to mention the considerable mental and physical health benefits5). London, which already had a “Congestion Charge”, has just expanded its Ultra-Low Emission Zone (ULEZ) to encompass most of the city, costing drivers of older vehicles £12.50 (US$17) per day.

The branding – recognising that this policy is explicitly aimed at reducing emissions rather than congestion – is indicative of the shift in public sentiment. Personal convenience is recognised as less important than protecting the planet – and thus now comes at a cost. Where people do still choose to travel by car, efforts are also being made to reduce the environmental impact of their trip. The next iteration of Google Maps will show drivers their lowest carbon route, considering traffic and road conditions; where travel times are similar, it will default to the lowest carbon option.

Personal convenience is recognised as less important than protecting the planet – and thus now comes at a cost.

In many cases, and certainly until public transport infrastructure and urban planning regimes adjust, it will be impossible to wean people off their addiction to their car. Electric vehicles (EVs) are therefore viewed as a key part of the solution. Consumer demand already suggests that they are on the fast track to mainstream adoption. Global EV sales in 2021 are expected to rise by 49% compared to 2020, which in turn was 30% above the previous year6.

Every major motor vehicle manufacturer has announced ambitious plans to expand their range of electric vehicles, often alongside the phasing out of petrol and diesel models altogether. As well as reflecting customer demand, such moves are a response to government announcements of impending bans on traditional combustion engine vehicles7. Evidence from the U.S. shows clearly that regulations around emissions are a direct driver of EV sales8 and more such announcements are expected.

Global electric vehicle sales in 2021 are expected to rise by 49% compared to 2020, which in turn was 30% above the previous year.


There is no question that current infrastructure is inadequate to support widespread adoption of electric vehicles, but here too things are changing. In his $2 trillion infrastructure plan, US President Joe Biden has allocated $174 billion to promote their adoption across the country, including installing 500,000 charging points nationally and electrifying the federal fleet and school buses, alongside $85 billion for public transport investment. Such public investment is key – not least in convincing a sometimes-sceptical private sector that the political rhetoric around the carbon agenda will be backed up by action and dollars, thereby leveraging private capital to exploit the investment opportunities that exist.

Changing mobility patterns affect real estate

The implications of these changes for the world of commercial real estate are immense. The distribution of activity and buildings, at every scale from the global to the most micro, is fundamentally driven by when and how we move around. Fundamental changes to patterns of mobility will therefore have multiple implications for occupiers, investors, and developers. We believe that several issues have been brought to the fore by recent events that are worth particular attention.

As we discuss in (Work)force of nature, occupiers are increasingly focussed on ESG issues. Those who are aiming to meet science-based targets for reducing their climate footprint will need to consider their scope 3 emissions, which include how employees travel into work. As a result, an increased premium will be placed on locations and buildings located near to public transport or in areas with strong active transport infrastructure. Planning authorities will be increasingly focussed on how to design and shape urban environments in ways that minimise emissions. This will have implications for land use zoning and development policy, given the evidence that population density is a key driver of transport emissions9.


Retail locations may also look to capitalise on the benefits of active transport. A study covering 14 U.S. cities found that bike lanes and associated environmental improvements had a positive impact on employment and retail performance – particularly driving engagement with food and beverage outlets10. During Covid lockdowns, many streets have had traffic restricted or have been pedestrianized; retaining these measures will help reduce emissions, with positive benefits for the viability and vitality of the retail environment11.

The reduced air and noise pollution produced by EVs mean that many areas of our cities are set to become dramatically more liveable. Property located near busy roads will suffer less of a discount than they currently experience. This has considerable implications for the housing market and will be of interest to investors and developers prepared to take a longer-term view.

There is also a considerable opportunity in the EV charging market – the value of which is expected to reach €36 billion by 2030 in Europe alone12. While residences and workplaces will need to provide much of the charging capacity, car parks and retailers may also be able to attract customers and drive footfall by installing charging points for customer use. Cycle lanes and electric vehicles are not a panacea for the issues faced by our cities or our climate. There are no magic wands or one-size-fits-all solutions: towns and cities will work to find their own solutions. But over time such changes are set to alter the shape and structure of our urban environment – offering challenges and opportunities for every aspect of the real estate market.

1https://www2.deloitte.com/us/en/insights/focus/transportation/future-of-business-travel-post-covid.html 2https://www.sia-partners.com/en/news-and-publications/from-our-experts/roadmap-reducing-carbon-emissions 3https://www.francetoday.com/travel/paris/the-paris-bicycle-boom/ 4Avison Young analysis of Apple Mobility Trends Reports; https://covid19.apple.com/mobility 5https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021 6https://www.ev-volumes.com/ 7ICCT, 2021. Update on government targets for phasing out new sales of internal combustion engine passenger cars. https://theicct.org/publications 8https://theicct.org/publications/ev-us-market-growth-cities-sept21 9https://www.centreforcities.org/reader/net-zero-decarbonising-the-city/cities-need-to-become-denser-to-achieve-net-zero/ 10https://nitc.trec.pdx.edu/research/project/1161 11https://www.justeconomics.co.uk/education-employment-and-economic-development/the-pedestrian-pound 12Chargeup, 2021. Charging up Europe through binding capacity targets for publicly accessible charging infrastructure and Member State action plans. https://static1.squarespace.com/static/5e4f9d80c0af800afd6a8048/t/60d426dda0462c583a9d0353/1624516320310/Charging+up+Europe+through+binding+capacity+targets+for+publicly+accessible+charging+infrastructure+and+Member+State+action+plans+.pdf


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