At MIPIM PropTech, five top international real estate CEOs discussed their firms’ commitments to innovation and how PropTech will change their businesses in the coming months and years.
Clelia Peters, President – Warburg Realty, Metaprop Co-Founder
Guy Bradley – Chief Executive – Swire Properties Ltd
Ric Clark – Senior Managing Partner and Chairman – Brookfield Property Group
Chris Grigg – Chief Executive Office – British Land
Lisa Picard – President and CEO – Blackstone
Owen Thomas = Chief Executive Office – Boston Properties
Tech for service
Panelists opened the session by discussing the significance of technological innovation in their business. As directors of some of the world’s largest real estate owners, the panelists interest and opinions on innovation have the potential to sway overall market sentiment. The panel provided insights on the US domestic market, China, Hong Kong, and the UK.
Swire Properties’ Guy Bradley characterized the rapid innovations overtaking the Chinese market as Leapfrogging . The Wechat mobile application is the center of life in China impacting everything from interpersonal communication to payments and financial management. In general, mobile technology is driving innovation, leapfrogging older computer based technologies. In the UK, Chris Grigg from British Land, noted the massive disruption to retail caused by web based services like Amazon. Disruption is impacting the US and Chinese markets with Amazon and Alibaba absorbing increasing retail market activity.
Space requirements and occupancy planning are being disrupted by more efficient design requirements. Innovative tenants require less space per employee and look to landlords to provide shared amenities that can be accessed On Demand. The rise of mobile workers, not tethered to a physical location, has driven the growth of shared office space. Lisa Picard, Equity Office Properties, compared current space use model to the outdated auto industry where new features are added to an outdated platform but the platform itself never innovates. Ultimately, all of the panelists recognized that the disruptions to space consumption will impact the way they manage their leasing businesses in the future.
Each of the companies have different strategies for embracing disruption. Ric Clark, of Brookfield Property Partners, discussed his firm’s strategy of investing in technology companies to access innovative solutions, rather than trying to develop them internally. Chris Grigg, British Land, noted the long development cycle in the UK forces his firm to deeply vet new technologies which may not apply to the current part of the development cycle.
Despite the wide breadth of the disruptions to the real estate business, each panelist acknowledged that the primary driver for embracing innovation is the improvement of the customer experience. Improved efficiency in building management, changes to amenities, innovative means for payment and space uses will all be driven by customer preferences and the need to lease space and drive NOI. Owen Thomas, Boston Properties, explained that technological innovation will drive NOI by creating efficiencies in operations and satisfying what tenants want.
Erik Cooper & Elliot Berenger
Columbia University GSAPP