Does anyone remember what life was like before the iPhone or TV on demand? Advancements in tech have completely reshaped the way we live, work and play. However, while tech has bolstered the industry’s performance, the sector has largely remained the same.
I have attended the Milken Institute Global Conference for several years. The three-day event gathers some 4,500 delegates in Beverly Hills to debate topics from global politics and economics to science and innovation, public health and philanthropy and, of course, finance and real estate.
At a breakfast event we hosted alongside this year’s conference, I was joined by Abhishek Lodha from Lodha Developers and Ian Carter from Hilton in a discussion about real estate and the modern consumer. In a world that is better connected and faster moving than ever, a few key themes came through loud and clear. These centred around the needs of the modern consumer, the impact of tech, increasing sensitivity to sustainability and developing true talent diversity across the industry.
Today’s consumer demands experience. This structural change should influence every decision about real estate.
Property now must be as much about service as it is about product. Millennial and Gen Z consumers increasingly favour uniqueness and flexibility over materialism and possession. What the property industry offers – homes, offices, retail, leisure or hotels – therefore needs to feel individual and service-focused. People do not want to live, work or stay in identikit boxes. Creative ideas, personalisation and careful curation is vital.
Tech has a major role to play, both in providing a personalised service and in bringing forward more intelligent construction processes that not only speed up building but also allow room for individuality. Developments also need to adapt to factor in tech, in terms of smart-home features, but also elements such as delivery bays for online shopping and the provision of services already being adopted by the hospitality industry, such as keyless access.
A growing focus on wellness is similarly changing the make-up of our developments and the way we do business. Gyms, cycling facilities, communal spaces for relaxation and outdoor areas are increasingly important in workplaces and residential developments.
Sustainability, too, is driving consumer choices outside our industry. Just as many millennials disapprove of brands that use excessive packaging, pollute our oceans or source materials unsustainably, so too will they favour the most sustainable buildings and companies. Doing the right thing makes business sense: higher upfront capital expenditure can be offset by greater demand and higher rents, as well as lower long-term operating expenditure.
To truly adapt to the needs of the modern consumer, the diversity of the talent pool within our sector has to change. A failure to understand multiple perspectives or tap into overseas markets would represent staggering missed opportunities.
We need to encourage a more diverse group of young people to consider careers in real estate. Adapting to the needs of the modern consumer means embracing diversity, tech, sustainability and wellness. The future success of property firms will depend on it.
Jonathan Goldstein is chief executive of Cain International