We recently hosted our 12th annual Global Investor Seminar. 

Andrew Stainer

This flagship event brings together clients from around the world for two days and is a unique opportunity to discuss, compare and contrast the market, and hear differing views on the real asset world of today.

The main theme and key area of consensus this year was the importance of disruption. With more than €50bn of direct real estate assets under management globally, we experience technologically driven disruption first hand.

Key for us all is understanding not just the scale and accelerating pace of recent technological advances, but also how these changes might impact real estate and, most importantly, what role we must play in anticipating and integrating them.

Offices and retail are at the centre of the disruption debate and for offices, the evolution of co-working dominates the conversation. No longer is it just the realm of small start-ups; it is also an important flexible option for larger corporates and in unpredictable markets flexibility has real value.


Proptech touches all sectors within real estate

Source: Shutterstock/Sonpichit Salangsing

But not everyone is convinced. Is it a fad? Is there too much supply? Will the model stand up in a downturn? Who will the winners and losers be?

What everyone agrees on is that co-working has accelerated the focus of occupiers and landlords on what an office should look like and offer – now it must put the individual’s needs first.

Offices that focus on employee wellbeing and offer collaborative spaces, leasing flexibility and a wide range of amenities are now a critical differentiating factor in occupiers’ decisions. These factors were the genesis for the design of TwentyTwo Bishopsgate and this will have to become the norm.

We experience technologically driven disruption first hand

While many commentators have foretold the demise of physical retail, the consensus from our session was that retail real estate is not dead and will not die. The ‘but’ is that retail space is integrating itself more seamlessly into our daily lives and away from the specialist purpose-built units we have grown accustomed to. Retailers continue to evolve their interaction with customers and technology is enabling this engagement to be constant.

The real threat to retail

Brands such as Apple and Nike, and more recently Tesla, have made it clear that physical retail space is critical to their engagement with consumers and while many retailers are rationalising the number of stores they operate, there is a widely held belief that a physical presence is fundamental to brand offering.

The real threat is therefore not to retail real estate per se, but to retailers and owners who fail to recognise the critical importance of an innovative, appealing and evolving omni-channel consumer experience.

While these are examples of just two traditional real estate sectors, all property sectors are exposed to disruption, and it is critical that today’s investor can anticipate and respond to this change.

To me, the importance of specialists who are fully immersed in their respective real estate sectors and understand the specific idiosyncrasies of the businesses that operate within them should now form the backbone of any investment management team. Only with this specialist knowledge will we truly understand and be able to adapt to the impact of disruptive technologies on the way we build, use and invest in real estate.

As an industry, we have a responsibility to engage with technological advancements, not just because it is essential to our commercial process, but because we have a responsibility to society and future generations. We cannot and must not put our heads in the sand.

Andrew Stainer is global head of asset management, AXA IM – Real Assets