Wondering how many office centric companies could not move to a work from home strategy? It might not be your preferred option but should be pretty easy to switch to.
gensler.com/research-insig…
gensler.com/research-insig…
Reducing longer term office footprint down to a core (that will be utilised 70%+), investing in productivity enhancing workplace tech, and placing big focus on health & wellbeing could be a trend that is turbo charged by Coronavirus.
Happening anyway. This is what #SpaceAsAService is really about. But the clear need for optionality (through being able to work remotely at any time) will surely incentivise smart companies to push on with this strategy.
Which reinforces the requirement for #LessButBetter real estate. Sq feet drops but £ per sq feet rises. Overall, space drops more than cost increases so both sides win. Occupier reduces total bill + landlord increases total income. But.....
Who benefits from the increased revenue? Achieving it requires many new ‘Services’ to be provided, so the ‘Operator’ becomes much more important. Who is the ‘Operator’?
I tell all stakeholders it should be them. Landlords, Flex Space companies, Property managers or the Workplace industry. It could be any of these. The market is in flux. Mostly, none of these groups are up to the job. Yet. It’s all to play for.
The market isn’t yet large, but it will be huge. Starting (unlike most disruptions) from the top. Those in the most expensive space, with the most expensive employees, have the greatest incentive to concentrate on offices as tools for creating a ‘productive workforce’.
They say £3 on utilities, £30 on rent, £300 on people. The real estate industry historically has focussed on the 3 and the 30. In a #SpaceAsAService world the focus will be on the 300. The problem? That is a different business.
Focussing on the 300 means a refocusing of real estate around people. And Service not Product. Culturally, organisationally and financially that is a big leap. 100% possible but perhaps only by 30% of incumbents.
The difference will upend value chains. And determine who benefits from that rise in revenue that is waiting to be reaped. IMHO the winners will be companies that embrace Human + Machine thinking. Better humans + better tech are necessities. And that is a hard game to play. Today
The really big question is whether that means real estate becomes a different type of industry OR real estate stays as is and partners with other industries. There is a logic to both.
Perhaps real estate should stick to its knitting (especially because of Capital Markets requirements) and bring in talent to operate space. Same as hotels. But that sort of feels like a missed opportunity. A combined skill set has to be the way to create the ultimate experience?
Treating offices as software would be great. Build, Measure, Learn. Rinse and repeat. Hardware + Software + Services - office as iPhone. Or modular, like Android? Who has the best business?
iPhone only has 18% of the smartphone market. BUT. Makes 82% of the markets profit. Does total control of a building and its operations give you that level of premium potential? Don’t know - but it is what we’ll discover over the next few years.
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