By James Pearson, EMEA Occupier Research at CBRE
In the June 2018 edition of EG Tech, I wrote about how 40% of occupiers plan to increase their tech investment over the next 12 months, with another 22% over the next three years.
That's not entirely surprising given the sheer amount of 'disruption' happening, not only to the real estate industry but to global corporations themselves.
Currently occupiers are investing in tech to secure operational and building efficiencies, and in the near future the investment will shift towards user-focused tech. That's what occupiers want, and that's how they say they'll achieve it.
But what do occupiers think will happen even further in the future, say by 2040? How will their businesses change and how will real estate have to react to enable continued business innovation and productivity?
CBRE's latest research project, Portfolio 2040, explored these issues.
The age of permanent disruption
The story of tech disrupting the world is well rehearsed. But the point now is that in the future, permanent disruption will be the name of the game.
Companies think their procurement decisions will increasingly be made on demand, all enabled by tech. Everything, from goods, services, employees and even buildings, will be used when they need them, with the ability to turn the tap off when they don't.
In the same way that we are already seeing supply reflecting demand a lot more rapidly in industries like retail (think how e-commerce has enabled more accurate, efficient customer decisions), this will soon spread across other industries and eventually into real estate.
The key, then, is that the companies that can proactively invest in the infrastructural tech and business transformation agenda today, will benefit in the future. Real estate can be, and should be, the driving force to enable continued business success in an age of permanent disruption.
An asset shared is a portfolio halved... right?
One of the traditional governing principles of corporate real estate decision making is "our real estate needs to enable our people to be most productive at the most efficient cost point". Tech is changing this principle.
With growing volumes of data on assets and employees across global portfolios, companies today can consolidate their real estate footprint because they know how often and how much space is being used at any one time, while maintaining employee productivity.
The next evolution of the principle, due to the era of permanent disruption, is asking questions like: "How much HQ and core space do I need? Where can I find flexible space when I need it? How do I provide the right digital platforms to enable my people to work remotely, across the globe?"
Today, with products like Portfolio Optimiser, Asset IQ, and Calc, CBRE is helping clients digitise their portfolio data to answer these questions. The result will be increasing use of shared assets across an increasingly diversified portfolio, with luxury core and HQ buildings at the heart.
Planning for tomorrow
So, what next? Plan for the future occupier real estate portfolio today. Tech will be a large chunk of this planning, but it's not the complete answer. Managing cultural and organisational change will also play a key part. But, either way, take the leap of faith and invest in the future tech-enabled portfolio, today.