How technology will impact property developers

April 2015

In his ‘Conference of Undertakers’ blog post, British Land CEO Chris Grigg asks three questions regarding technology. Here’s how I would answer.

First, how it is changing the behaviour of our customers? 
Technology will impact the behaviour of customers in the same way that Ernest Hemingway described how one goes bankrupt ‘Two ways. Gradually, then suddenly.’ Where now one can see outliers, who work wherever they wish, in and out of the office, with all their data in the cloud, via mobile devices plugged in to online applications with little stored locally, within a few years this will be the norm. They may still be in the office, but they won’t spend much time fixed in front of a desktop monitor. More likely, and give this a few more years, they will only be in the office when they need specialist tools and/or environments to collaborate face to face with colleagues.

Structurally companies are likely to become more and more Shamrock like, in Charles Handy’s parlance, where a small core of full-time in-house staff coordinate activities with outsourced partners or autonomous subsidiaries and ever more on-demand contractors. Technology will enable this trend to spread ever faster, and repurposed central offices will act as the community glue not the day to day workplace.

Second, how can/will it change the way we interact with our customers?
The process of morphing, from quarterly senders of rent demands to corporate infrastructure partners, will speed up. A sense of place will develop to incorporate ‘the digital layer’ where through sensors, contextual data and ultrafast broadband the online and offline worlds will meld to provide a richer, more engaging built environment. Relationships with customers will become real-time, open and more trust based, and in doing so will open the doors to a level of service that is but a pipe dream today.

Thirdly, how will it change the way we develop and operate our buildings?
In a word, profoundly. The best developers will not be selling physical assets, they will be selling ‘Offices as a Service’. Their buildings will offer services that people need, emotional, physical and digital, and they will be selling them on demand, and in a fluid manner. The new breed of lightweight companies will have requirements that ebb and flow dramatically. Buildings will operate in a way that accommodates this. 20% of the market may remain as long term fixed occupiers, the balance will flex.

The success of WeWork has been striking. Is this the new form offices will take? We’ll see how things pan out over a full property cycle but regardless, their understanding that they are selling community as much as office space is prescient. When you do not need an office to actually get work done (and few do) what point do they serve? The answer, and what defines the fundamental impact of technology on developers, is that it is not in providing a desk to sit at.

Antony

PS. First published in Estates Gazette 4th April