Over the last few weeks I have been taking part in an online course entitled ‘Future Proof Real Estate’ delivered by Dror Poleg and Antony Slumbers (learn more here: Future-Proof Real Estate Course — Real Innovation Academy – Real Innovation Academy).
I decided to take the course for one specific purpose: to understand the key trends impacting real estate – and there are many – too many to mention. The last 18 months have seen a lot thrown at the industry but Covid-19 accelerated a big shift – many (including me) would say an overdue shift. Just imagine the Evergreen in the Suez trying to turn, it’s a great analogy for real estate. Overlay onto this ESG and you have a real driver for change. So let’s change real estate for the better – as it’s not going anywhere – we live, work, play and learn in it.
The starting point is very much an office-based focus. Not everyone, but it was the more common working choice of many organisations. That had led to real estate almost taking for granted what it had. Real estate in its many shapes is a huge part of our lives in terms of where we live, work, play and learn. The evolution now means that the office needs to have a clearly defined purpose – otherwise why would we go there? So what do we need to think about when we look to the now and the future:
- COP 26 and greater discussions around ESG have highlighted the challenge faced by real estate. The lack of green buildings in Glasgow for example. As individuals we spend a considerable amount of time inside buildings, whether an office, our house or somewhere else. There will be a need for us to monitor the data and have meaningful conversations and KPIs to track progress. Are buildings improving over time – are we tracking environmental conditions throughout the workspace and buildings. If not, then it is time to.
- Some of our spaces are badly ventilated. The quantum of older buildings that need restoration and refurbishment is significant and ensuring that the air quality is high quality will have more focus from the users of buildings. More renovation rather than rebuild needs to occur but in doing that we need to create spaces that work for the now and future.
- People want to be productive. Employers want a productive workforce so create real estate that allows productivity. We also need to create spaces that allow us to “play” – in residential and other spaces. The owners of real estate need to continue to evolve their space to continue to consider the changing needs of their users.
- Technology is progressing. My children do not believe that I didn’t have a mobile phone at their age (granted that was 28 years ago!). How phones and other technologies are advancing is phenomenal. Our lives are there on our phone and this will continue to advance. When Finley speaks to his children in 28 years, I wonder where technology will be. Real estate needs to utilise this technological growth. The days of having an “App” for your building are already old school. Think broader to enhance both the building and the user experience.
- The use of AI can help real estate to understand how the building is being used but even before building can help monitor how it is built. Building better buildings has a huge benefit to the users and the owners.
- Will there be a need for more or less office space in the future? Well there needs to be the right kind of space – whether in your own office or flexible / co-working space – and this ultimately means more space per person but also new space in more suburban areas. The location of where people live has moved further out of the city. City life is expensive and the last two years have shown that you can live out of the city and still enjoy the city life when you need it. This can lead to the growth of “work-near-home” spaces.
- Flexibility is needed in real estate – this could be more flexible leases with the landlord or flexible spaces operated separately. This is an investment that will return benefits in the future.
So there is plenty to think about and I am enjoying learning more each day. It helps me understand more and work with my clients and network to move the dial.
All of the above boils down to creating an experience for your customers. Real Estate has never really had many brands but now is the time for “Brands” to shine. People are loyal to brands and real estate needs its customers to be loyal. And lastly, flexible working is the defining characteristic of the future real estate. Think about how flexible your real estate is? And certainly do not buy real estate that is not flexible.
Enjoy the weekend.
Words of Wilko 