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

Essential tech for real estate: Apple Watch

April 2015

For property people, wearables, or computing devices that one ‘wears’ on one’s body via smart clothing or eyewear or jewellery, should be of great interest. For it is through interaction with the built environment that these things will find their killer application.

Today these devices, which the Apple Watch will explode interest in come its launch on April 24th, are mainly of use for those looking to track their exercise routines or for easy access to email or social media notifications. On a day to day basis they are not of great utility.

At the Apple Watch launch though we saw a couple of prototype applications which show where all this stuff is going. First off was an example of remotely opening a garage door to allow a delivery in. Fun but just as easy using your phone. The W Hotels app however nails the value. With this you would be recognised immediately upon entering your hotel, shown your room number and then, through your watch, be able to access your room. Now that removes a number of pain points we all recognise.

And it is in this interaction with ‘the space around us’ that wearables will flourish. Where now we need keys, or codes, or have to fill out paperwork these devices will simply deal with it.

The Apple Watch needs the Internet of Things. CISCO reckon 50 billion sensors will be installed by 2020. When cities are made smart it’ll be wearables that help unlock ‘the digital layer’. The Apple Watch will be huge; just not yet.

Antony

PS. First published in Estates Gazette 4th April 2015

Essential tech for real estate: Brain food

March 2015

I am firmly in the camp that agrees with the Oxford Martin study ‘How susceptible are jobs to computerisation?’ that 47% of jobs are at risk. Given the clear pattern in technological development this seems inevitable. As discussed opposite the world is changing fast and with consequences. What we do, and how we do it will naturally morph as we allow computers to do what they are good at, and focus on how us humans can flourish in partnership with the machines. And we will on two conditions: first, we must be cognisant of technological developments and secondly we must be permanently learning. Well fed brains are needed to create the jobs that will be destroyed.

And it is technology that can facilitate this feeding. Concurrent with the rise of smartphones and broadband has been the uptake of Podcasts and MOOCs (Massive Open Online Courses). At no cost you can study at many of the Worlds greatest universities. Google Coursera or Udacity to be amazed at what is available.

Similarly Podcasts are brilliant for learning. I am an addict of EconTalk by Russ Roberts of Stanford and Exponent with Ben Thompson and James Allworth. One provides in depth conversations with brilliant economic and business minds and the other exceptional insights into the role of technology in society at large.

The negative attitude towards these types of tools is that they are no substitute for face to face learning. But the reality, and the positive appreciation, is that they enable many more people to be much better educated than ever before. And that will be our saviour.

Antony

This first appeared in Estates Gazette on the the 21st February

It's not about Disruption - it's much more important than that

March 2015

Eighteen years after Clay Christensen wrote The Innovator’s Dilemma, and launched the concept of ‘Disruption’ on the business world, we at last have main agenda sessions at MIPIM on the subject. But, you know what, whilst disruption is indeed a hot topic, it is not where the real estate world should be focussing. There is a bigger picture to embrace.

If you want real disruption in real estate then you need to be working on taking out the whole world of agency, automating transactions, circumventing existing real estate banking and essentially making the ecosystem that meets annually at MIPIM redundant. Is that what you want? Can you see it happening?

Thought not. Yes it may happen in areas (Pop Up stores spring to mind) but unless we, as an industry, completely fail to grasp the real value of technology, to us and our customers, it is unlikely.

For there is a much wider goal we should be aiming at. And that is turning Real Estate into a truly, end to end, digital industry, where by combining highly skilled humans with the pervasiveness and capabilities of modern technology we create value by improving the lot of everyone we touch. Whether colleagues, clients, partners or suppliers, we all do more, with less, more efficiently and more productively. For each other. And by doing so we make the world a better place. And profit by doing so. It was Benjamin Franklin who said “Do Well by Doing Good” – well 250 years later the idea still resonates doesn’t it? And in a world connected by technology you’ll ignore this at your peril. If only for the sake of business, doing good is a sensible strategy.

You may have heard about the Oxford Martin report suggesting that 47% of jobs will disappear in the next 20 years at the hands of technology. The march of the robots. Well, I’d say hurrah to that. As we let computers do what they are good at, as we have to, they will free us from the mundanity of much work that we currently have to do, and free us to do what we, as humans, are good at. And that is being creative, using our imagination, having empathy and intuition.

The bigger picture is how to embrace the opportunities afforded by modern technologies to make your business x10 better than it is now. It is about how to do much more with much less, how to have wider, deeper, more timely data, provide a better service to customers, remove friction in every interaction, collaborate better, have a wider pool of talent on tap, engage and be engaged better than you currently are.

We in the real estate industry have the responsibility to create great places, where people love to be and that make them happy and productive. It is this industry that sits at the heart of the great global urbanisation that is occurring. If we simply focus on using all the tools at our command to create great places then we will have succeeded. If we don’t then we really do deserve to be disrupted.

Antony

This was first published in the Estates Gazette MIPIM 2015 Guide

Property people make one of two mistakes when it comes to tech

March 2015

Property people make one of two mistakes when it comes to tech: they either take it too seriously or not seriously enough.

Those who take it too seriously proclaim their tech is operating in a multi trillion dollar market that is ripe for disruption and that the time is nigh. Obviously the whole Agency and relationships model is old hat, they say, and it is only a matter of time before their software disintermediates the whole shebang through pure, comprehensive data and algorithmically powered transactions. The irony that they are attempting to become the new middlemen is widely lost.

They are likely to be disappointed, at least in the next five years or so. A real estate transaction is not like booking a room, or hailing a taxi; it is multi dimensional, involves multiple parties with diverse data requirements, and is, for most participants an infrequent activity. As such they often require exactly what humans are good at, namely imagination, creativity, empathy and intuition.

However, computers have different skills to humans and this is why the other type of property person is wrong to not take tech seriously enough.

Tech may not take us humans out of the transaction but it sure is going to disrupt the way we work and how we occupy real estate.

First off, property is as much about money as anything else and the finance industry IS being disrupted. Everywhere we will see algorithms displacing humans, matching human wants and needs, and removing the layers of rentier intermediaries. Crowdfunding and Peer to Peer lending will explode.

Secondly Big Data, whilst massively overhyped and always susceptible to the old adage that correlation is not causation will have major impacts in retail (through shopper preference analysis), industrial (through the increasing sophistication of warehousing) and offices (through extensive use of sensors to aid management and promote more efficient occupancy).

Thirdly, Pop Up stores may have started as a way to fill empty shops but their ability to spice up a retail location will ensure they become an ongoing feature in and out of town. This simple purpose transaction can and is one to be end to end digitised. Whether a computer or a human is better at deciding which Pop Up store is right for your brand will be an interesting area to watch. With enough data this is algorithmic nirvana. But is enough data available?

Fourthly, co-working centres are certain to increase in popularity, if only because the prevalence of self employment (voluntary or involuntary) means people need someone to go. And they tend to be much more human spaces than most offices. And as work/life becomes increasingly entangled people respond to places that feel more like home. Someone needs to make them more widely available though, as commuting hours a day just to meet like minded souls is an evolutionary half way house.

Fifthly, and this is the real disruption, a combination of ubiquitous high speed broadband, mobile devices, billions of cheap sensors and cloud computing will change the work that we do and in doing so the type of space we require. Anything that can be digitised will be and computers will deal with anything that can be algorithmically processed. Much that we do, for example, with MS Office can/will be automated. Spreadsheets, presentations, report writing; they will mostly be automated or handled via SaaS applications in the Cloud. As businesses become ever more digital they will realise swathes of processes or repeated tasks can be done away with. And then the interesting question really does become ‘what is the point of the office?’.

So, in conclusion, tech really is disrupting real estate; just not in the way most of the ‘disruptors’ are claiming.