The term “smart city” was first used in the 1990s, with technological overtones. However, over the years, the concept has evolved to focus on the role of human capital and the relationships involved in urban development. A definition given by Giffinger et al in 2007 describes a “smart city” as “a city well performing in a forward-looking way in economy, people, governance, mobility, environmental, and living, built on the smart combination of endowments and activities of self-decisive, independent and aware citizens. Smart city generally refers to the search and identification of intelligent solutions which allow modern cities to enhance the quality of the services provided to citizens.”

As a general approach to the factors that are currently taken into account when thinking about a smart city, in 2012 Lobardi associated six components of the smart cities with different aspects of urban life, as follows:

  • Smart economy – industry
  • Smart people – education
  • Smart governance – e-democracy
  • Smart mobility – logistics and infrastructures
  • Smart environmental – efficiency and sustainability
  • Smart living – security and quality

Smart cities in Spain

Taking into account the factors above, the index known as “Cities in Motion”, prepared by the Center of Globalization and Strategies (CGS) examines the factors that make a city a smart city. The 2016 edition of the index lists approximately 180 cities, among which are seven Spanish cities (on a par with Germany and the United Kingdom, who tie for the European lead with seven cities each). Valencia, Barcelona and Madrid, in particular, rank among the 50 “smartest cities” in the world.

Barcelona ranks highest at number 33. The new plan adopted by the local authorities, known as “Barcelona Digital City Plan 2017 - 2020”, aims to progressively improve digital public services, provide all areas of the city with sensors to collect open data, create digital infrastructures, and grant resources and incentives to bridge the digital gap for the most vulnerable groups, so that each community has access to the resources that allow citizens to use technology to ensure better public services and a more balanced and sustainable economic and social growth. Projects are being developed in areas such as the use of technology to improve the environment, sustainability and how to make town planning resources more efficient and user-friendly.

Madrid comes second to Barcelona in the ranking. A plan for a “Central Zero Emissions Area” will be implemented in the Central District of Madrid in 2018. Incentives to promote the change towards a more sustainable mobility include the reduction in road tax and free access for electric vehicles in the Central Zero Emissions Area, in addition to free parking already in force. Additionally, to reduce pollution, free movement is allowed for electric and ECO vehicles, in contrast with vehicles powered by fossil fuels.

Cities such as Málaga, A Coruña, Seville and Bilbao, are also among the top 100 cities in the “Cities in Motion” ranking, highlighting their urban planning, environmental control and data platforms open to the citizens.

For instance, “Coruña Smart City” aims to improve the quality of life of A Coruña citizens and its economic and business environment with technological innovation. The project proposes a new model city and is the result of an agreement between the Municipal Administration and the Ministry of Economy and Competitiveness. The initiative has funding of EUR 11.5 million, 80 percent of which is co-financed by the European Regional Development Fund. One of the initiatives of this project is to monitor and reduce water and gas consumption in public buildings. In addition, an energy control system will be implemented to study the consumption of electricity, water and gas supplies in public buildings, compare tariffs and evaluate consumption parameters to reduce costs and pollution.

Bilbao shares a “Smart City” award given by the Financial Times Group with five other cities in the world that have also stood out for their support for sustainable development and desire to increase the quality of life of their inhabitants. Bilbao was granted the award in response to a municipal strategy to achieve a perfectly connected city via new information and communication technologies, as well as its commitment to innovation, knowledge, excellence and internationalization. The Bilbao City Council was the first public institution in Spain to receive the Certificate of Conformity with the UNE 178301 Smart Cities and Open Data Standard. This is the first standard that establishes a set of requirements, for the re-use of Open Data or Open Data elaborated or guarded by the public sector, in the field of smart cities.

Smart premises - smart cities

However, the development of smart cities is not dependent on public initiatives alone; on the contrary, it requires the participation of private companies, third-sector groups and civil society as a whole. In particular, it is important to bear in mind that real estate, and real estate players, play a fundamental role in the creation of smart cities.

Smarter and greener buildings are becoming a trend in Spain, in an attempt to save energy and reduce carbon emissions and lower running and maintenance costs. Domotic systems help to control the home remotely to avoid wasting energy and providing a safer and friendlier living environment. Spanish construction regulations impose obligations on new buildings to ensure better insulation, more efficient heating systems, and the use of solar panels, etc to ensure increased energy efficiency.

Spain has also been promoting the use of electric vehicles for some time, which recently led to the amendment of the Spanish Horizontal Division Law to facilitate the installation of charging stations for electric vehicles in the car parks of private buildings. This means that no prior authorization of the owners’ association will be required, but simply prior communication to the owners’ association, provided that the costs of installation and electricity consumption are borne entirely by the party concerned.

On a larger scale, shopping centers are embracing the possibilities of technology and now offer opportunities for customers and retailers to interact with each other in real time during their visit to the mall through the use of dedicated apps. The app learns the buying habits of the customers and management receives this data in real time to offer specific, targeted promotions. In addition, the platform integrates business intelligence to store how many customers have purchased, in what time slot and in which stores. All this data is examined with a view to providing the best offers for a client at the best time. The app even lets customers check if the store they are planning to visit keeps a particular product in its onsite inventory, or order it in advance so that the trip will not be wasted. Commercial traffic intelligence is also used to let consumers plan their visits to the shopping center when they will find less traffic on the road and available parking spaces in the car park.

Online retailers are also changing the game with the smart technology they use in their distribution centers, which speeds up considerably the completion of orders and even monitors stock automatically as products go out. The use of big data is becoming so sophisticated that the stores’ systems can predict orders with a degree of reliability and process them almost without human intervention.

It is crucial for real estate companies to take full advantage of big data because of real estate’s status as a pillar industry of the national economy. It is only through a judicious use of available data to improve investment and marketing decisions that the real estate sector will be able to carry on playing a fundamental guiding role in the country’s economy.


There is no doubt that the emergence of smart cities is having an incredible impact on the real estate sector in Spain, opening up new types of real estate, new forms of commerce and investment and, therefore, new regulations to make correct use of them. Thus the work of city councils and public bodies in cities is also very important.

Although it may seem that the smart city is a concept of the future, most of the ideas described in this article are already a reality, available at our fingertips every day. However, caution is still needed to enable us to coordinate and use all the new possibilities of technology to benefit society in a way that will improve life without losing control of individual privacy. That surely will be the challenge of the next decade.