On a website about innovation, trends and new technology, a blog about Real Estate is not the first topic you would expect. Over the last decennia we’ve seen that the real estate industry is one of the most controversial market which is not chancing really fast.
Previous innovations in the real estate market
If we take a closer look to the market there are some changes visible already. These changes started in the last 10 years. Trends like BIM, LEAN, 3D printers and sustainability are already a trend for a while but during the credit crisis from 2008 it all speed up. When we take a closer look to BIM, LEAN and 3D printing in the real estate market we see the following:
- Building Information Modelling (BIM) an digital presentation of the constructional and functional characteristics of a building; an effective way to create an building which ideally suits the customer.
- LEAN, a management philosophy to create the maximum value for the customer focussing on less wasting
- 3D-printing; an digital presentation and construction of (parts of) buildings; an effective way to create an building which ideally suits the customer.
All trends are really focused on an effective way to satisfying the customer.
Lack of innovation due to ‘provider markets’
Since the crisis also the rent and rental market is changing. In years of ‘provider markets’ innovations did not have big stimulations. The customers had to deal with the real estate which was available in the market. Long term visions of the real estate owners where not really focused to keep the users with longer contracts. When customers during the crisis stopped renting meters, a lot of real estate owners became in trouble. A huge amount of offices became empty and a change in management strategy was forced.
But then, the change kicked in
The providers market changed into a customers market, so the real estate owners were forced to think along with their clients. The products needed to fit the customers wishes otherwise they would have choose for someone else, a positive site of the crisis I would say. Flexible rental contracts with less square meters became the new standard. Since a few years the crisis in the real estate industry is fully over, but if you ask me, this movement has just started and is gaining more and more momentum.
Real Estate as a Service
One of the ‘products’ from the change into a customer market is real estate ‘as a service’ Over the last years, we see that companies are coming up which offer a working place with fully services.
“Real Estate as a Service can be observed as the shift from renting an office to renting a working place.“
Customers sign a contract for a kind of ‘all inclusive’ working spot for mostly a short period. Services like internet, cleaning, catering, office supplies are arranged by the real estate owner. Reservations are made on an internet platform and is it possible to rent already for a period of a few days. It is a nice way to turn big, unattractive offices into attractive a fancy workspace for different companies. The buildings are besides a working place also a meeting place that can stimulates the cooperation between different companies in one building.
Real estate as a Service conclusion & outlook
The trend real estate ‘As a service’ fits completely in the current economy and suits the new generation. People like to have easy, fully service and want to be flexible. This same culture is currently developing at companies. We’ve seen that companies can change really fast. Especially young companies and start-ups can grow fast, shrink fast or change philosophies which can change the need of real estate. People and companies want to focus on core businesses and they don’t want to carry about the non-core businesses. For the new generation the offices are also less relevant. As mentioned earlier in my opinion this trend has just started. The current ‘flexible’ generation is taking over the economy in the upcoming years. Companies will shift more and more to an flexible part of their organisation. When we look to Real Estate as a Service I predict that this will become the standard for working places. Real Estate creators should already keep this in mind when construct an building. It should be possible for offices to ‘grow’, ‘shrink’ or change with their customers
If you have questions on this topic, please do not hesitate to reach out to me,
Jacco Casteleijn is advisor project control at a consultant company. In this role Jacco advise project organisations to keep track on time, risk and money for big projects. Furthermore, is Jacco an entrepreneur in real estate an co-owner of Heica Vastgoed B.V. This company is an creator of turn-key buildings for rent or sell. If you want to catch-up with Jacco, you can contact him via his LinkedIn profile.