By 2030, 70 per cent of the global population will live in urban areas. This means 1.5m people move to a city somewhere in the world each week.
All these new “urbanites” combined with an ever extending retirement age mean our workplaces need to appeal to the lifestyle preferences of three generations working together. In addition, the fourth urban revolution (of sensors and smartphones) is creating a new silicon geography and sucking investment into tech rich areas, challenging the established world order of cities.
These are just some of the considerations real estate professionals need to know about that challenge the way we’ve traditionally done things and have the potential to disrupt our industry and built environment.
On Tuesday I’m giving the keynote address at the RICS UK Summit, discussing these and other global trends affecting the buildings we work, live and play in. Ordinarily, real estate usually follows the demand that already exists in an area, but real estate can be a catalyst for change, not just a consequence of it.
Now, real estate can help create demand; take office buildings as an example. Occupiers want space that makes them as productive as possible, that also provides the type of “experience” to attract the best people. Investors essentially want the same, as they seek the regular rental income that comes from a continually occupied building.
At JLL, our extensive research into the future of work shows the importance of user experience on workplace productivity – you need to create a space where workers want to be. And the technology of smart buildings now allows us to gather data on how offices are being used, and what people want from them.
Companies of the future will be leaner, with firms relying more heavily on networks of freelancers and specialists for ad hoc projects. So understanding how best to collaborate remotely will be imperative.
For the real estate professional, it’s no longer just about sourcing the right sized building in the right part of town. The old saying, ‘location, location, location’, may soon be out of date. Big employers are creating new destinations – just look at Google in King’s Cross. Real estate now needs to work with HR to understand what the particular workforce requires. It needs to work with IT, to know what technology solutions will exist.
It needs that seat at the boardroom table, to show that expenditure on real estate isn’t a cost, but an investment: in the war for talent, getting the real estate right can help attract and retain people, as well as increase productivity.
Look at cities like Austin in Texas, Berlin, Brisbane and Copenhagen. They have proactively designed and built the diverse, characterful and sustainable workplaces that appeal to mobile entrepreneurs and young institutions.
As part of a so-called group of “new world cities”, relative to their size they attract a disproportionate share of global investment. It really can be as simple as that.
It’s an exciting time for property and, in particular, offices. As cities grow more dynamic, so do our workplaces. Sure, there are challenges – e.g. technological insurgents – but real estate really can be a catalyst for change, and provide the infrastructure and environment that attracts success.
Tickets to the RICS Summit 2017, on 16 May at King’s Place, 90 York Way, N1, for £195, available to book at rics.org