Re-thinking location, location, location
The next phase of the technological revolution will disrupt one of the mantra’s that guide the real estate sector. Location, location, location will need to be re-thought. Pervasive and ambient connectivity and Artificial Intelligence will continue to erode digital and physical boundaries. In this environment an increasing number of activities will become geographically disconnected, as people do different things in different places. Fewer and fewer things will require the constant co-location of labour.
The impact on office space could be dramatic, especially when considering the potential decentralising impact of autonomous vehicles. The impact of what people are prepared to do for commuting and what they are able to accomplish on that commute could rewrite property values previously dependent on transport links.
Machine learning has the potential to improve building management and energy efficiency; the Internet of Things will generate data to inform decision making further. It will also mean a great leap in the amount of data created. This volume will render cloud use uneconomic and too slow to respond. Real estate business will also have to e-think their own IT strategies.
Connectivity will become a key societal issue and the smart city will become an increasingly important factor in location choice. The cities that achieve this, possibly leap-frogging existing major commercial centres, could become tomorrow’s trade, finance, logistics or tech centres.
Artificial Intelligence will also blur organisational and industrial boundaries. Rethinking and reworking relationships with external partners and even rivals could see the emergence of powerful construction and real estate platforms. The role each player assumes within this ecosystem remains largely undefined. The role of orchestrator, hub and contractor for example could all change depending on how digital the industry becomes and the degree to which skills and capabilities shift in importance. Today’s strengths could be tomorrow’s weaknesses.
This new phase heralds changes in the nature of competition and collaboration. Technology must be aligned strategically to organisational and market change. What we do, where we do it and how we do it are all vital issues for investors, developers and occupiers to consider.