This is the eighth in our series exploring ten themes that will shape the next 10 years. Here we'll be looking at ‘Evolving Real Estate: Form, Purpose, Location' – the dynamics of the real estate industry are set for major change.

Number 8: Evolving Real Estate: Form, Purpose, Location

‘We shape our buildings, and afterwards our buildings shape us.’

If we want to benefit the most from all the themes in this series, we need the right real estate. Winston Churchill, in this quotation, was succinctly explaining how our internal environment shapes us: how the form factor, purpose and location of a space matters. The real estate is an input to whatever output is created within that space.

We spend 90%+ of our time indoors, in buildings, in real estate. And at an individual level each of us knows where we would like to spend our time. But at the collective level we really don’t pay enough attention to what our personal instincts tell us. Over the next 10 years we need to over-index on the need for ‘Human-Centric’ real estate. What form factor should a space take to optimally support whatever its purpose is, and where should it be?

Historically real estate has been very siloed. Offices go here, retail here, entertainment here, residential here etc. Asset classes were very distinct. Every building knew its place. Today though, everything is becoming amorphous. I work at home, use the office to socialise, and hotel lobbies for meetings.

Technology now enables us to do ‘Everything Everywhere All at Once’. RTO mandates fail because they fight against the tide of technology. The world of ‘everyone in the office, five days a week’ is fundamentally a pre-internet era construct. Which has just become clearer as capabilities have developed. As a society we are adjusting to this at different speeds, but adjust we will. There is no going back.

Hence the need to over-index on human-centric real estate. What matters when we have pervasive AI, and ‘the machines’ are doing alot of our work for us?

I think, regardless of asset class, these are the ‘Six Pillars’ around which we need to develop our strategies. Whether we are investors, operators or occupiers.

Health and Wellbeing

We have known for decades that the environmental quality of the spaces we occupy impacts our cognitive function. Get the lighting, acoustics, temperature, air quality, and humidity right and people can function at their best. And if you can do this in combination with providing different types of ‘perfect’ environments to suit personal preferences you will be enabling people to be as productive as they are capable of being. But YOU WILL ALSO be contributing significantly to their health and wellbeing. Over the next 10 years we, in real estate, will become super sophisticated about optimising our spaces and places to this end. From a business point of view, in order to get maximum productivity out ofyour employees, you first need to help them be happy and healthy:)

Ergonomics & Comfort

The physical quality of space really matters. Being human-centric means understanding what your spaces are going to be used for, by whom, and then very carefully designing the ergonomics and comfort to suit.

Technology Integration

Apple have become a multi trillion dollar company by seamlessly integrating hardware, software and service. We need our spaces towork like this. Spending ten minutes getting the fancy technology working before any meeting starts is a sign of not being human-centric. In a human-centric building your technological needs would be pre-known, and therefore delivered friction free as required.

Community & Connectivity

This is a fundamental pillar. Because it accepts that over the next ten years community and connectivity will be THE purpose of commercial real estate. Everything else will have been offloaded to‘the machines’. We discussed ​#HumanIsTheNewLuxury​ last week -and it underpins this. Why else, apart from doing what we cannot do elsewhere, would we bother to commute to an office? The best real estate will catalyse community and connectivity in ways we can barely imagine today. And they will have been designed specifically with this front and centre.

Flexibility & Adaptability

Sam Altman, the CEO of OpenAI, has a sign above his desk that reads ’no one knows what happens next’. And if he doesn’t know then nobody does. What we do know is that every building has to be designed to be maximally flexible and adaptable. Across the developed world we are entering an era of obsolescence. Literally billions of square feet of real estate has outlived its product/marketfit, and will have to be torn down, or repositioned or repurposed. We need to be smarter than this. We must create spaces that people can reconfigure and adapt to their changing needs.

Sustainability

And then of course the sixth pillar of human-centric real estate is sustainability. Regardless of current politics we all know that we have to decarbonise the built environment. So this is non-negotiable and foundational.

In summary then we’re need more green, tech-enabled, adaptive, multi-functional space that is deeply human-centric, where an exceptional user experience is the priority, and all the technology, data and AI we can muster is created and curated to deliver that.