Held in the MIPIM Innovation Forum, the panel session “Transform Real Estate Into a Performance Asset” featured moderator, Professor Dr. Norm Miller of the University of San Diego and speakers Marcus Tack – Schneider Electric, Real Estate Solutions, Pascal Brosset – Schneider Electric, CTO, Gilles Cordon – Schneider Electric, Real Estate Solutions, Professor Dr. Alexander Redlein – EuroFM & Vienna University of Tech, and Jean-Vincent Rischard – Xolf Sarl d’Architecture.
Focusing on the varying needs of owners and tenants of office space, the panel addressed how technology can be used to address these needs and increase the value of office buildings for both parties.
- What do landlord’s want? ROI (higher rents, lower expenses, faster absorption, longer economic life, higher residual value), Lower GHG, Meet CSR Goals. Landlords’ worlds are driven by economics, and sustainability is only addressed if it can impact the bottom line.
- What do tenants want? Productivity (greater employee attrition, greater retention, less sick days or heath issues, more output relative to costs, business success: profitability, market share an competitive advantage)
- What do occupants want? Good natural light, less noise, ability to focus, collaborate, good air, ergonomics, amenities.
The needs of tenants and the overall workplace trends and uses are changing, and
- Investors need to understand the changing office requirements. In the future, 80% of the work force will be mobile and the demand for flexible office space will grow.
- Office culture is changing: -Moving towards productivity based management vs. hours worked in the office. -Divide between generations generation Y is flexible and ready for new technology, generation X is hesitant to use technology and go to open collaborative work spaces.
Looking at how technology can be used to address this:
- The key is making office buildings more flexible. Traditional buildings are not flexible, but technology can be used to overcome this.
- There will also be increased value in flexible, technologically advanced offices. Already, advanced buildings trade at approximately 50 bps lower cap rates and achieve slightly higher rents.
- Lack of innovation in technology is NOT the issue. Useful technology is already here and at an affordable price.
- The limiting factor today is purely adoption. “It is not a matter of technology, it is a matter of planners working together.”
- Education about available technology and the benefits and value they provide are very important. There is a lot of room for consultants in this area to help bridge service providers, users of office space, and investors. Consultants can explain life cycle costing vs. upfront costs and how to implement office strategies.
- Highlighted case study: Unibal Rodmco, Majunga tower, Paris La Defense. Building where everything is connected and accessible through a platform on a smartphone. The building also has NFID technology which tracks the location of occupants throughout the building, helping companies understand their current and future utilization needs.
- For more information on sustainable real estate, visit josre.org
As the office market and the culture of office users are slowly changing, technology is becoming increasingly important. Technology enables office space to be flexible so that it can adapt to future demand changes and increase the value to both the owners and users of office space. The key is for owners and landlords to be capable of offering solutions that address these changing needs.
Lori is a 2015 MSRE Candidate at theUniversity of San Diego and received her Bachelor of Science in Business Administration at the University of Southern California. You can reach her at firstname.lastname@example.org.
Image: Images & Co. / S. Champueax