FINANCE: Last week’s MIPIM harkened back to the heady days of deals and champagne. But one of this event’s differences from those of the first half of the past decade was that this MIPIM was more thoughtful.
I am not referring to a “negative lessons learned” way but rather to a “positive, how do we drive the industry forward and change for the better?” sort of way.
This was apparent at the BPF/Addleshaw Goddard seminar on technology. To describe real estate as a “laggard” in this area is probably being generous, but this tardiness presents a great opportunity, which is why the event attracted a great number of industry leaders, as well as technologists, who are planning to exploit this techno-gap.
Technology speeds up the acceleration of obsolescence in property, a thought reflected by Jon Lovell, global real estate sustainability director at Deloitte, who said: ‘“Accept, embrace, and get on the front foot.” The Deloitte digital team’s lexicon at the seminar included such terms as “gamification”, “skunk works” and “hackfest”. They wear jeans in their new office in Clerkenwell, which is furnished with the most expensive sofas and beanbag chairs.
There was no consensus in the room on what future-proof space looked like. Thank heavens for that! If there had, it would have almost certainly been wrong. However, the one thing no-one disagreed on was that delivering good wireless broadband connections throughout a building was a must. And positioning offices as “hadron colliders” of people set the scene for thinking about how offices are used. Demand continues to rise for informal, collaborative urban workspace, but in terms of requirements there is definitely a generational split – astroturf not being a popular floor covering in all corners. Neil McLeod, Aviva’s head of central London offices, observed that when people start disappearing into the stairwell to have a private conversation, it generally means that open plan has probably gone too far.
Chris Grigg, chief executive of British Land, defined the challenge simply: “The good owner of offices today is seeking to address not just the requirements of the lessee, but also the people who will use the space.” Knowing your customer is key.
Retail, in responding to its customer base, has had to do more than most in adopting technology. David Atkins, chief executive of Hammerson, said that his company’s shopping centres had a big grab of e-mail addresses a couple of years ago just to discover that the younger generation doesn’t use e-mail. His answer to the dilemma was that in building digital infrastructure, it was key to ensure there was connectivity between social networks, websites and apps, with the flexibility to add on new modes of communication and easily reposition marketing strategies.
Going back to being laggards, I believe the area where we are the furthest behind is smart buildings and smart technology. When you look at how other sectors such as aviation have changed radically in the past 20 years, many of our construction techniques seem not from the last century but the one before. This is in part due to funding. Most equity investors and all banks want certainty in their financial models. That means everything has to have been done before and therefore we shun innovation. This will have to change. Whether it is population growth, climate change, or the current delivery of services such as the NHS, which is already on the verge of becoming unaffordable, it is time for the real estate industry to step up to the plate. We need financing mechanisms that respond, owners that are willing to innovate, and collaboration with a sector that we struggle to relate to. Maybe it’s a generational thing.
The BPF will embrace the need for change at its summer conference, entitled “Can property keep up with the pace of change?” with representatives from the likes of Cisco and Tech City helping us to find our way.
So while there was a forward-looking slant on MIPIM, some things never change. We still topped the league tables for champagne consumed and there was some hard partying, even if I did have to leave it to the next generation of women to populate the podiums at Tristan’s infamous bash.
Rebecca Worthington is chief executive of Lodestone Capital
