It is easy to forget, at times, that the value of commercial property is based ultimately on the demand from users, rather than on the opinions of financiers or investors.
Such demand is increasingly influenced by the impact of technology. The digital revolution is a net job destroyer, and those economies that can respond readily to the changing environment will be the winners, in that as they adapt, they will generate the workers that match the new opportunities.
But, despite what it may look like, this piece will not focus on the importance of a responsive educational system.
The digital future will have become well defined before our schools are transformed in any material way. Economic demand and digital-friendly jobs will instead result from a combination of talented immigrants, flexible policies and a cultural willingness to respond positively to change. Outside of London, it is hard to see where this combination of conditions might exist in Europe.
A symbol of Europe’s inflexibility can be found on the planes of aircraft consortium Airbus. Boeing planes have air nozzles that allow each passenger to set temperature and volume. On Airbus planes the air is controlled centrally. Central controls do not represent a viable model.
With the democratisation of access to information, the notion that the state knows best is increasingly implausible. The scholar Moises Naim writes of this phenomenon in his book, The End Of Power; society’s established institutions continue to lose their credibility and, therefore, to lose their authority.
Our economic order is dominated increasingly by the fast pace of reinvention and innovation, rooted in the embrace of flexibility and individualism. We have also entered an age of “solutionism”, and a world in which apps outperform institutions. For example, to assist the homeless, write an app that allows them access to surplus food from restaurants. Even in the world’s poorest countries, mobiles are ubiquitous.
London has an interesting future, largely because the city is the English-language crossroads of the world. The UK cannot claim the same good fortune. The continent’s prospects are worse. Overall demand for commercial property will decline, but those properties that remain strong, such as those serving London, will grow in value, as a result of their relative scarcity.
Steve Jobs famously said: “We are here to put a dent in the universe.” Such aspirations suggest the potential that exists for London (although it will mean overcoming of UK and EU economic policies).
Jobs also said: “It is more fun to be a pirate than to join the navy.” So hoist your sails.
Scott Malkin is chairman of Value Retail
No comments yet