INTRODUCTION SUSTAINABLE LOCATION INDEX 2020 (SLIX 2020)
The Netherlands is home to 354 municipalities today. Every municipality has its own unique heritage, characteristics and composite defining its location attractiveness. However location attractiveness, from a future investment perspective, is polarizing fast due to changes in consumer behaviour (ecommerce), population changes (urbanisation, ageing population), environment and social media effects.
You might want to invest in real estate or expand your business in one of these municipalities, but how do you know which location is best for sustainable financial growth? The Sustainable Location IndeX 2020 is developed by Sustainable Capital Group (SCG) to provide you with these insights. Its goal is to ascertain location attractiveness on a municipal level for sustainable investments within the sectors of Real Estate, Energy, Mobility, and Agri Food.
The SLIX Model uses 4 basic ingredients : people + profit + planet + location identity. Within those 4 categories, 32 meaningful specific sub layered indicators are derived from 11 different sources, creating over 14.000 data points. Sector specific attractiveness indicators are selected to create sectoral views.
The result is a holistic and objective view on sustainable location attractiveness, which can be monitored over time.
PEOPLE – URBANIZATION IN AN AGEING SOCIETY
Bigger cities grow faster. The first category in the model therefore concerns ‘People’. Size, dynamics and nature of population in a city are of fundamental importance for business performance. The drawing power of the city and the competition in the surrounding areas is also essential when assessing a city’s strength. Research shows that urbanization causes bigger cities to have better growth prospects at the expense of smaller ones.
PROFIT – WIDE SPREAD PROSPERITY
The category ‘Profit’ is used to quantify the inhabitants in a city. A big population does not necessarily translate to high property values. High unemployment rates or a relatively low prosperity can result in adverse spending behaviour. Also, economic momentum has a big impact residents’ economic stability. Furthermore, the solvability of a municipality decides the decision-making power towards sustainable policy making. Acknowledging that current economic health directly affects future levels of prosperity, a combined set of variables relating to economic maturity, stability and prosperity, is in order.
PLANET – QUALITY OF LIFE FOR THE FUTURE GENERATION
Measuring sustainable location attractiveness is another way of answering the question: ‘Is the municipality future ready as an attractive place to be?’ A future ready municipality is a place where people like to live, work, educate, visit, shop and stay. The answer can be derived from a combination of local occupier demand indicators which directly links to future real estate as well as infrastructural and environmental investment purposes.
The ideal future sustainable location provides excellent mobility, has a healthy standard in environmental en energy consumption and has a high income equality. On top of that it serves a high level of facilities and provides its occupiers with an adequate quality of life. The willingness from an investor to pay high prices for specific locations is related to future expectations in combination with current demand.
IDENTITY – UNDERSTANDING LOCATION ATTRACTIVENESS DNA
The success of a location being perceived as attractive largely depends on ‘Identity’ factors.
For instance, the presence of students is an indirect indicator for city attractiveness. Highly educated people choose interesting cities to live in and also generate a certain atmosphere attracting higher educated people that work at higher developed businesses generating prosperity.
Tourism is another important indicator for attractiveness. An attractive location does not only have a large supply of points of interest on the map but is also rewarded by visitor demand ‘liking’ the location on social media. Not only because tourists generate retail sales, but also because they select cities that they can identify themselves with.
CREATING SUSTAINABLE CITIES AND COMMUNITIES – UN SUSTAINABLE DEVELOPMENT GOAL 11
SCG’s Sustainable Location IndeX 2020 is developed in collaboration with BDResearch. The SLIX objectively compares and ranks Dutch municipalities on the topic of sustainability. Its goal is to ascertain location attractiveness on a municipal level for sustainable investments within the sectors of Real Estate, Energy, Mobility and Agri Food. The SLIX definition of a sustainable city is: a location’s attractiveness from a living, working, visiting and residing’s perspective.
KPI’s used in the SLIX model match United Nationals Sustainable Development Goal. Sustainable Capital Group applies a location’s SLIX score and attractiveness profile to risk profiles to enable different sustainable capital rates. The higher the attractiveness score, the lower the risk profile, the more attractive sustainable capital rate.
In order to be regarded as a Sustainable Location a high score on topics such as Poverty, Clean Air, Municipal Waste, Public Transportation and Affordable Housing is key.
Sustainable Capital Group was founded in 2020 to support entrepreneurs and investors in realizing their sustainability ambitions. SCG is active in the sectors: Mobility, Real Estate, Agri food, and Energy.
Curious to find out which locations are most attractive to invest in? SCG will gladly assist you.
Advising + Implementation = Impact