Commercial Property Pioneers season two: the need-to-knows
If you haven't found the time to tune into season two of our Commercial Property Pioneers Podcast, don’t fret. Here are the key takeaways that we've gleaned from listening to some of the world's most respected property experts.
During the second season, we had the privilege of speaking to seven incredible property professionals. They are:
- Helen Shellabear, Managing Director of Shellwin Real Estate
- Christoph Wittkop, founder of Sonar Real Estate
- Steven Jude, CEO of NewFlex
- Jeanne Wood, Senior Associate VP Head of Business Development at CallisonRTKL
- Steve Holloway, Global Franchise Development Director at IWG
- Benjamin Willmore, CEO of YoooServ
- Jason Sibthorpe, Principal and president UK at Avison Young
Here are just some of their fascinating insights:
There's no set path into real estate
One of the most interesting takeaways we learned from the seven experts was that there's no set path into real estate. Some, such as Helen, Jason, and Christoph, progressed into property through the world of financial services. Others, like Steven Jude, have enjoyed a less linear route, with Steven beginning his career in the world of travel.
Now, investors are even using the franchise model to enter the real estate market. Steve Holloway revealed that many entrepreneurs are looking for new opportunities in smaller towns and cities. An office space franchise that can act as a local base for a multi-national corporation is something he believes is catching many eyes.
The point is investors enter the world of real estate in lots of different ways. You could even follow in Helen's footsteps and take three months out to complete a course at the London School of Fashion before going on to build a profitable portfolio of properties!
The pandemic has accelerated the pace of existing trends
Many publications have talked about the impact of Covid on digitalisation. It seems that over the last 18 months, digital transformation has moved at a quicker pace than anyone believed possible. Now remote working, which was once a distant dream for office workers, is part of our daily lives.
"The big trends that were happening before Covid – like AI and the green agenda, for example – will continue" says Steven Jude.
Another key area of concern is ESG and ensuring commercial buildings meet their occupants' eco-conscious expectations.
"We believe investments will be more focused on sustainability," said Christoph. "This was so before the pandemic, but it's acted as an accelerator."
Jason believes that inviting more voices into the real estate space will help the industry make necessary changes.
"Diversity can help to challenge ESG issues. Economists, planners, financial experts need to come together, alongside chartered surveyors, to tackle the problems we're all facing."
We're more health-conscious than ever
It's also fostered developments that make workspaces healthier and more hygienic places to be. Benjamin and Jeanne shared that their respective companies have altered their buildings by removing doorhandles, installing proximity sensors and installing sanitising points, to promote what Jeanne calls a "frictionless experience".
Wellness has moved into the collective consciousness over the last few years, but the pandemic has shown us its more than just a trendy buzzword. Jeanne also said the more companies are looking to create "physical and emotional safe spaces" within their office environments. She has also noticed an increase in interest in outdoor spaces, which may stem from people enjoying spending more time in the fresh air during lockdowns.
Local hub and spoke models will prevail
A common trend that many of our guests highlighted is the 'hub and spoke' office model. For large organisations, this could mean establishing smaller office bases in towns across the country that let employees use office space without the lengthy commute.
Steve Holloway shared that the IWG network will be more selective about investing in central business district locations in favour of localised office spaces. However, Jason explained that understanding what will work for each company and its employees will be a crucial part of commercial property's future.
"Science and data will need to underpin what comes next. There isn't a one-size-fits-all way forward. Take your time and you'll end up with the right strategy for your unique business."
Retail properties are bursting with opportunity
The British Retail Consortium reported that, as of March 2021, around one in seven retail properties were empty. And finding a way to reverse the slow decline of the high street has proved tricky for even the most experienced property professionals.
"With people shopping more locally, there's an opportunity to be part of bringing life back to high streets," said Helen. "But it's about timing – I really hope there will be a push from local authorities and investors to bring forward plans that just make sense."
However, as more local hubs emerge, companies are beginning to identify new opportunities around former retail space. For example, some of our guests revealed that they have successfully converted (or started to convert) disused malls in the US into mixed-use space, where offices, retail units, leisure and even domestic properties sit under one roof. Jeanne also shared that CallisonRTKL is in conversation with a large department store that could convert former stores into office space.
Steve Holloway said that converting retail premises into usable office space is a challenge. But with many franchise partners on IWG's side, who have years of retail experience behind them, it's one he believes can easily be overcome.
Diversity and modernisation need to be a key focus
Historically, the property sector has been dominated by men, often from privileged backgrounds. Now, it's left real estate with what Helen calls "a massive image problem".
"We're working under an archaic stereotype of an evil landlord collecting rent while tenants are struggling with leaks and whatnot. It makes it sound like all investors care about is collecting the money."
But rather than let its past define the future, Jason believes that the industry now has an opportunity to commit to a more diverse future.
"The opportunity for real estate to be seen as a force for good is huge. As an industry, we haven't attracted diverse talent, in terms of either gender or ethnicity, and it's exciting that we now have opportunities to do that."
Jeanne also revealed that, while her sub-sector of architecture has become more diverse, there is still a lot of work to be done at her senior level.
The role of the office has changed
All experts agree that the office is here to stay, rebuffing early predictions that Covid-19 could signal the end of office working. But the seven also concur that the role it plays in our professional lives has now shifted.
"People aren't coming to office to do focused work," explained Jeanne. "So we need to ask how it can be used to support teamwork, innovation and collaboration, and how can we make these spaces as productive and happy as possible." Helen also said that, as working from home isn't viable or preferable for everyone, "the office will change, but it won't lose its relevance for businesses".
Everyone echoed Helen’s statements. From now on, it's clear that offices will be used to foster connection, offer opportunities to learn and act as professional social spaces, with much of the heads-down work being completed at home instead.
The future is flexible
One thing that our seven guests could agree on is that the future is truly going to be flexible in commercial property.
Steven Jude shared that even real estate behemoths like CBRE are investing in flexible office spaces and predicts that 30% of occupiers will seek flexible terms.
"But I can't work out who the 70% are that don't want this," he laughed. "Other than, perhaps, global banks and organisations that thrive off that trading floor atmosphere." Instead, Steven believes that traditional leases are likely to soon be in the minority.
"I've been saying for years, 'the future is coming, the future is flexible'," said Steven. "Now, it's obvious. If a giant like CBRE thinks it's good to invest in this sector, it permits everyone else to do so."
If you'd like to learn more about the world of commercial real estate investment, also check out the first season of Property Pioneers! You can also check out our previous tenant guides and investor guides to uncover the secrets of commercial real estate.