New technology and technology businesses will have a dramatic impact on the UK real estate market over the next five years according to the latest research from leading international law firm, Nabarro, in its newly published report UK Real Estate in the Digital Age – What does the future hold?
Research conducted by FTI Consulting on behalf of Nabarro surveyed 302 real estate investors, developers and agents, controlling combined assets of over £350bn to examine their attitudes to the future of the UK real estate market in the digital age.
Reflecting the growing influence, importance and dynamic development of technology businesses, 86% of those polled believe that occupier demand will come from companies in this sector above all others in the next two years. These same technology companies are driving changes in the way people work, where agility and vibrant, collaborative spaces are increasingly important, and in the technology they expect their workplaces to deliver.
88% of respondents believe the demand for agile, flexible work environments is set to rise and transform the office of the future. Millennials, who will make-up 75% of the workforce by 2030, prefer the flexible work ethos, which allows them to work anywhere at anytime. Co-working was originally led by start-ups, entrepreneurs and freelance workers as it delivered opportunities for cross-pollination and collaboration. These spaces harness a sense of disruptive energy, so it is little wonder that larger corporates are now looking to tap into them as well.
Virtual reality will by 2020 be as synonymous with property marketing as the brochure in the 1990s or the website in the 2000s. But there are wider applications, with virtual reality likely to become intrinsic to the planning process, as developers seek to show planners and the public how developments will look years before a spade is placed in the ground. Design flaws can be spotted and fixed in advance, and technology will boost the speed at which buildings are let.
Ciaran Carvalho, senior partner and Head of Real Estate at Nabarro, said:
“Technology is changing the way we live and work while disrupting traditional business models. The impact on our offices, workspaces, infrastructure and the way we transact, build and occupy commercial real estate means we have to spot trends fast in order to make the most of the future, rather than be overtaken by it. The real estate sector needs to be a fast follower, not a slow adopter.”
Modular construction is the breakthrough technology that will become the norm in a time of housing shortages, limited supply of land and tight public finances. 64% of respondents believe modular construction is already being used or will be in the next two years, and 59% believe that 3D printing will be fully utilised as part of the construction process in the UK within the next 10 years.
Smart buildings and smart cities have been on the horizon for years, but for many in real estate they are now becoming a reality with 61% believing the internet of things is having a significant impact on buildings now or in the next two years.
With many older buildings soon to be rendered obsolete due to environmental regulations, there will be an increased demand for state-of-the-art smart systems to regulate buildings. The ‘intelligent building’ is making use of Big Data to develop strategies that help improve energy efficiency and productivity, with 81% of respondents believing that this will lead to ‘intelligent buildings’ within five years.
The rise and use of driverless vehicles will ultimately see commercial real estate near to train and tube stations becoming less valuable and also have a major impact on the residential sector. People will be able to commute longer distances in less time and also work whilst they are doing so allowing people to live further away from city and town centre business districts.
The UK-based participants in the poll were engaged across the property world, with 79% engaged in the office sector, 64% in retail property, 52% in residential, 40% in industrial, 37% in hotels and leisure and the remainder in logistics, student housing and healthcare.