New kinds of real estate solutionsDownload article
Urban life is changing and the opportunity of addressing new needs is pushing real estate companies to develop innovative solutions in order to stay ahead of the curve. What is bringing these models to the market?
London is “experiencing a large inflow of people aged 22-30 (graduate brain drain from the rest of the country), and an outflow of people aged 31+” Prodo Millennials Housing Survey, 2017
Moving to a new city in 2018 is much different than it was 10-20 years ago. Even though people still strive to find a balance between location, work, lifestyle and income, the modern professional is a lot less interested in ownership and measures quality a lot more through experiences.
Modern professionals seek like-minded individuals to share their time with, easy access to reliable transport systems and enjoy shared amenities. In other words, the modern city dweller wants to develop both personally and professionally. Starting your own business is easier, more funding is available and if you have a physical product in mind, a single 3D printer might be your future factory.
Talent attraction and the consequent economic growth, demographic changes and housing shortages are just some of the current key challenges for the economic development of cities that have been identified by city leaders. As these challenges impose new needs for city dwellers the real estate industry is beginning to respond to the changes by offering many innovative products addressing the new opportunities.
1. Future of living
Would you live in high-standard shared accommodation?
“The co-living microflats market now accounts for 5 to 10 percent of Britain’s 25 billion pound build-to-rent private rental sector, made up of institutionally-backed blocks of flats built for families to rent.” *co-living defined as ““microflats”, where residents share facilities such as dining areas, lounges, work spaces, laundry rooms and gyms”. Reuters, 2017
Future of living: Coliving
This solution came to light as an evolution of student housing and serviced apartments that provide all-inclusive and flexible high quality living units to residents. Each tenant gets an ensuite room (15 sqm or more with a bed, desk, chair and bathroom), access to a shared kitchen and a large array of communal areas (co-working spaces, a rooftop, fitness studios, a cinema room, a bar, etc.). This community-focused housing primarily attracts millennials, international nomads and professionals who relocate as often as it offers a one-stop-shop-for-all solution. More importantly, co-living spaces offer a variety of social activities (cooking classes, new skill development, sport clubs) and professional events to its tenants. Sometimes these events and activities are managed by community managers and other times they are led by the tenants themselves, often enhanced by coworking facilities.
2. Future of Work
Would you start a factory at your desk?
“Celebrating the world of engineering, we will showcase the exciting growth and development of new technologies and innovation taking place here on our premises, a specialised facility campus for makers in East London.” Gavin Poole, Here East CEO, 2018
Future of Work – Workspace 4.0
The decreasing price of 3D printers, small scale electronics and robots are enabling the swift rise of small-scale manufacturing and the birth of the tech maker movement— this fragmented but highly growing segment blends a workshop type of operation with a traditional office. It’s giving the green light to a new kind of manufacturing and factories. New products are designed, manufactured and sold meters away from the CEO’s desk. Easy access is needed in order to allow for the rapid movement of materials in and out and good ventilation and back of house facilities are in high demand. This is driving makers back to city centres.
Would you step out of your office and work in a cowork for a day? What if it’s just at your lobby, free and accessible for you.
Future of Work – Open coworking community – evolution of building lobby
As the coworking facilities became the places of choice for small business and small and innovative teams, their also create the right atmosphere for individual work, small teams and innovation units working in more agile ways while enjoying the buzzy atmosphere. A new model emerged; a traditional lobby of a building with multiple floors offering the sense of openness, ad hoc interaction, good ventilation and variety of choices of environments for diverse activities, so typical for coworking places. Extending from the lobby this multistory facility provides all you ever missed in a traditional office. All the floors of this new cowork are shared but only by the tenants, external members are permitted if the places are underused and the revenue from externals is used to offset the shared price of the permanent tenants.
3. Future of retail
Would you like to choose, customise and order your own design in the store?
“Reimagine the store – Be more than a store, put digital in your physical, Sell online instore
Experiment with experience – The best way to innovate your business is to experiment. Shop in magical reality, Get personal with AI, Design for the eye
Transform your business – Your customers, competition and culture are always changing.
Try, try, try before you buy -Answer the direct question -Discover the value in your value“, from Deloitte Retail 2018
Buy – Retail going digital
Consumer behaviour has changed significantly with the rise of e-commerce and digital technology, especially thanks to the uptake of virtual reality. Product customization, testing home fittings and even the act of trying on clothes in a shop is changing in response to the expectations of digitally savvy customers.
The aim of these new technologies is to enable consumers to have a seamless experience while testing new products and items, customising each good while also introducing new digital tools into real life environments. For example: robots guiding customers, interactive digital menus and mirrors that allow the testing of a number of colours of one type of dress are commercially available nowadays for a vast number of retail customers.
4. Future of entertainment
Would you like to play?
“eSport venues are becoming a part of urban infrastructures.” Populous 2018
Future of Entertainment – e-sports venues
Our parents either played sports or watched them on TV. The digitalisation of games is leading to new phenomena; everyone taking part in as well as watching others play without the need to play themselves. Because of over digitalisation of digital games, every spectator is an active competitor. The world of eSports is evolving and entering the media industry as well as becoming an essential aspect of relaxation in the workplace.
As the new industry is predicted to reach 1 billion dollars by 2019, it needs high-profile events attracting new evangelists and visionary investors. This market is what every traditional sports league dreams of: attracting a young, global and diverse audience that wants to meet in a specific location to enjoy the experience, compete as a spectator and win without prequalification.
The demand is there, so the only remaining question is who will supply the authentic eSports venue or state of the art facilities that will bring people together?
Many solutions could be found. Adapting existing arenas or dedicated areas could work. The eSport experience can be become much more into of empty lobbies, underused auditoria and offices. The opportunity to explore the future of live eSports experiences through the lenses of competitors, fans and broadcasts is not far off as relaxation and entertainment becomes an integral part of the workplace.
5. Future of RE financing
Would you like to invest in the tallest building in the world? Or would you help the poorest people to repair their roof?
„The microfinancing project has helped more than 40,000 families in Uganda and Kenya access loans to secure adequate housing and improve their living conditions.“ Mastercard foundation Habitat.org
Finance – Microfinancing and crowdsourcing
Real estate is still perceived as a very attractive investment opportunity. New emerging technologies such as blockchain allow a single lease or proof of ownership to be shared by a virtually infinite number of people. Soon the crowdfunding of public infrastructure and real estate will shift profits to these consortia of micro investors as many crowdfunded projects will be completed successfully.
Emerging patterns – flexibility, easy and seamless access
The driving force is to ease access to anything requiring a transaction, bring about smoother and better customer experiences with the ever occurring underlying topic of flexibility. Traditional RE products and dedicated places of proven typologies merge and blend into many variations of hybrid buildings calibrated to meet customer needs, enhanced by features of the digital dimension and leading to new expectations by the new kind of urban workforce.
The modern person could live in a co-living community, create products using 3D printers and enjoy the flexibility of workspaces, customise their outfits, play and enjoy e-sport events and co-invest in large real estate projects, expecting high returns in exchange for amazing experiences.
Would you like to be in position to enjoy these emerging models?
Imagine; living in a co-living community, running a business, creating using 3D printers, customising your shoes, creating, testing and playing sports in virtual environments in new venues, enjoying co-investing small amounts with high returns, and enjoying the flexibility of spaces, workspaces and cities themselves.
Prodo Millennials Housing Survey, 2017
Deloitte 2018 – Future of retail