Business models in the real estate industry are not ready to embrace future social, economic and technological change, a panel discussion on the challenges facing the sector heard at the Provada fair on Tuesday.
Business models in the real estate industry are not ready to embrace future social, economic and technological change, a panel discussion on the challenges facing the sector heard at the Provada fair on Tuesday.
‘Business models in real estate are not equipped to adapt to change,’ Lisette van Doorn, CEO of ULI Europe, conceded in response to a comment from the floor that property companies’ business models are too rooted in static structures to be able to deal with new concepts.
A key challenge for any business approach to be successful in real estate is that, ‘you have to be able to value the place,’ Van Doorn said.
Challenges
Entitled 'The Future of Real Estate', the panel examined a range of factors set to impact the built environment in the years ahead from growing urbanisation to big data and technology, the war for talent and sustainability.
Van Doorn cited density as one of the ways in which the challenges of growing urbanisation and keeping cities sustainable can be addressed. This can be achieved by harnessing the right technology, she said. 'At ULI Europe, we have defined density as a way to deal with the issue of growing urbanisation which is one of the main challenges in Europe. Technology is the "enabler", the key to achieving that,' she said.
The panel agreed that the real estate industry is not ready for much of the change set to sweep across it in the coming decades. 'We are still searching for answers to how to deal with the fast pace of change,' said panellist Frank van Blokland, director of the association of institutional property investors in the Netherlands IVBN. 'The pace of change is so rapid, in some cases we don't yet know what some of the changes will be.'
Outside impetus
The panel also agreed that any innovation in the real estate industry will come in response to change from outside it. Maarten Vermeulen, managing director of Europe, Russia & CIS for RICS, cited the example of Easyjet founder Stelios Haji-Ioannou who with all his 'Easy' concepts turned traditional leasing models on their head.
Van Doorne noted that new concepts arising from the 'shared economy' are already bringing change to the property industry such as AirBNB for the hotel sector. 'We need to become more flexible and more adaptable,' she said.
Earlier in the session, Maarten Vermeulen, managing director of Europe, Russia & CIS for RICS, presented a six-point plan of action to tackle future change. He cited the war for talent; ethical behaviour; use of technology and big data; the creation of sustainable cities; strong leadership; and seizing new opportunities as the six areas where action is needed.
Click on the link below to read more about the RICS report 'Our Changing World: Let's Be Ready'
