For ages, real estate has been defined by the tangible: buildings, land, square feet. Nowadays, however, the worlds most valuable businesses make their money from what is intangiblebrands, networks, knowledge, and experiences.
As of 2020, 90% of the value at the S&P 500 comes from intangible assets, up from 32% 40 years ago. The equivalent figure for major European companies lags behind, at just over 74% in 2020, a factor that likely contributes to Europe’s lower growth rate and per capita GDP. Much of the difference is made by a few unmatched American technology platforms.
Real estate, too, must evolve beyond its physical footprint.
At Atrium Ljungberg, where I work, we started that process a long time ago. Our market offering is not only built on bricks and mortar, but interactions and services happening inside and between offices, apartments, and retail spaces. This makes them greater than the sum of its parts. Our portfolio is more than a collection of buildings: It is the life between buildings. For that reason, we dont operate buildings separately, but focus on developing large, interconnected districts.
In a way, we could be seen as a platform company, enabling people, businesses, and ideas to connect and grow. This philosophy drives our megaprojects redeveloping parts of Stockholm.
Real estate as a platform business
At their core, platforms create value by coordinating interactions, reducing barriers and transaction costs, and enabling large-scale economic activity through network effects. The highest-performing businesses on the S&P 500 today create ecosystems where value is co-generated, but facilitated by these companies.
Of the worlds 10 largest companies by market capitalizationfrom Amazon and Alphabet to Metaseven can be considered platform businesses. All sprung up in the last two decades. Sweden’s most valuable company, Spotify, fits into the platform archetype too.
Let’s apply platform logic to urban environments. A thriving city district is a dynamic system where different actorsresidents, businesses, visitors, civil society, cultural institutionsinteract in ways that ideally enhance each others experience. The role of a developer, then, is not just to build and lease space but to curate and connectfacilitating an ecosystem where people and businesses can thrive. This includes thinking beyond the traditional landlord-tenant relationship. A more holistic approach ultimately delivers increased value also to individual tenants.
Just as nightclub owners need the right crowd, we carefully consider the first tenants in our developments: Who will create the most value for others in future? They lay the foundations for whoever comes next. This is also how you must start growing a platform. Weve introduced flexible memberships that allow businesses to access workspaces across different locations. Weve partnered with mobility providers to offer shared transport solutions that reduce car dependency. Weve invested in cultural programming that extends a districts life beyond office hours.
In each of these cases, our broader ambition is to generate lasting impact for our customers and other stakeholders, including city councils.
Why we report livability to financial markets
Urban environments have always derived their value from interaction, not just location. The classic example is the agglomeration effectwhy businesses cluster, for instance, in financial or life sciences districts, or why creative industries thrive in repurposed warehouse spaces. Its no secret that economic productivity is shaped by knowledge, relationships, and cultureand you likely see this in your own work. This is why companies pay a premium for office space in vibrant areas, why retail thrives in lively environments, and why people prefer communities that offer more than a place to live.
If a company attracts or keeps better talent because of the neighborhood its in, or if a retail street sees increased foot traffic because of a carefully curated mix of tenants and public spaces, the economic impact of these factors isn’t always obvious at first. But to every CEO, CHRO, or owner, their significance grows over time.
Many employers that ignored these factorswhether by relocating or staying in the wrong placelater dealt with talent flight, engagement drop, and operational struggles. In retrospect, the consequences were clear.
It is no coincidence that many of the worlds most valuable companies were born in Silicon Valley, which is an exceptionally livable and well-balanced environment. The repercussions of the areas rapid economic growth have since put pressure on some livability aspects, but the livable foundation was a key ingredient to its success.
Against this background, weve developed our own index to capture a wider set of critical livability values. The index not only measures factors like safety and accessibility, but also social interaction and cultural vibrancy.
Over the past few years, weve significantly advanced our own index score measured across our developments. Since we are a listed company, this score is regularly reported to the stock market, alongside our financial and decarbonization reporting. However, the index is not just a reporting measureit is directly linked to our sustainability bonds, integrating these intangible values into our financial structure. The more we improve livability, the lower our cost of capital. Its a way of quantifying what the market increasingly understands: Places that cultivate interaction, well-being, and identity hold lasting value.
Well-being as a shared value
One of the most overlooked aspects of value, crazily enough, is well-being. Urban loneliness is rising. Stress levels are rising. The way we design and activate spaces in real life can either worsen these problems or help solve them. The platform mindset is crucial here: Isolation is the biggest obstacle to well-being, which relies on interaction, a core function of platforms.
The best urban areas are those where people feel connectedto their neighbors, to culture, to work, and to nature. This is why we emphasize not just physical design but the social and emotional experience of a place. That includes shared green spaces and foodsome would argue this matters mostto diverse retail, health, and leisure offerings. Developing a place which shapes peoples daily lives comes with great social and economic responsibility, affecting their health, creativity, and sense of belonging.
How urban development must evolve in the platform era
As the economy continues to shift toward intangible value, championed by platforms, the best real estate developers will understand their role not just as builders or operators, but as city life shapers. This means embracing new objectives, new partnerships, and a new mindsetone that sees urban areas and individual buildings as centers for interaction rather than just physical assets. Urban planners and architects play important roles, but developers are the economic engines defining both projects and functionality over time. Still, compared to architecture, real estate often lacks an innovation mindsetsomething that has real consequences.
We need platform companies in the physical world to be as ambitious as platforms in th virtual one, otherwise it will lose its relative appeal. Relying solely on digital platforms to shape how people live and interact is hardly a sustainable model. To create conditions for greater well-being, we need to strengthen the real-world layer that digital platforms cant replace.
The real-world city naturally exposes us to spontaneous encounters and experiences, sparking creativity in ways algorithms cannot replicate. It engages our innate reward systems through meaningful interactions, making cities uniquely capable of driving both innovation and human well-beingwhether or not we actively seek it. This is precisely what digital platforms, with their self-reinforcing bubbles, struggle to achieve. It is also why the city remains humanity’s greatest invention, effortlessly breaking through our mental echo chambers to prove its value as our ultimate interactive platform.
Real estate clearly has a void to fill, as the industry isnt fully delivering on the promise of cities as platforms. To change this, we must learn from the most successful platform companies today. They can teach us a lot about structural efficiency and capacity to shape behavior and economic activity.
Digital platforms are not role models in every aspect, but they have certainly demonstrated how to challenge the status quo, link people and companies in new ways, and generate economic value on an unmatched scale. These are all needs in the physical world. There is a clear opportunity for the real estate industry to apply platform principlesand every reason for us to do it.
Linus Kjellberg is the head of business development for Atrium Ljungberg.
The Fast Company Impact Council is a private membership community of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience. Members pay annual membership dues for access to peer learning and thought leadership opportunities, events and more.
