Much has been said about the major disruptive elements facing the real estate industry, namely increased government intervention, a changing retail environment and intervention from the world’s leading tech companies.
These threats are real and we are already beginning to see change. However, I believe that the emergence of Autonomous Vehicles (AVs) may well have the most significant and longest lasting impact.
It is quite possible that AVs will fundamentally change how and where we will live and work in future and this should have a direct influence on how we are designing our towns and cities today.
AVs broadly (and simplistically) fall into two categories: service drones and people carriers. When asked to picture these two categories, most of us will think of flying Amazon delivery drones and ‘driverless cars’. Both of these are already in operation, so it is natural for us to picture them first, although they are only the thin end of the wedge.
But let us focus on the more obvious impacts of drones and people carriers for now. As humans, our most precious commodity is time. Objects have no time value, yet we spend much of our time travelling to objects, when really it would be much more sensible for them to travel to us. This suggests that the future for non-experiential retail is bleak, because the use of AV delivery vehicles will make the economic advantage that online retailers have even more pronounced.
We set aside a massive amount of space in all of our real estate to the store objects, which we only use sparingly. It would be much better for these objects to be summoned as required. Already we are seeing buildings being designed to accommodate flying drone deliveries.
Cars that drive themselves will also fundamentally change the landscape. There will be precious little incentive to own a driverless car, so the need for car storage in urban locations will be reduced dramatically. It is also highly likely that these vehicles will be electric-powered, meaning that air and noise pollution will be reduced dramatically.
As well as a dramatic reduction in the need for car parking, there will be a welcome reduction in street signage/clutter and fewer restrictions on developing next to or even over roads. So we can expect to see major new developments built on former car parks, the rethinking of car parking spaces within existing buildings and a lot more personalised digital street advertising to distract us as passengers when going from A to B.
Location, location, location less important
However, I believe the impact of AVs on our towns and cities could be much, much, greater than these relatively superficial changes. Rather than thinking about ‘driverless cars’, we should really be thinking about ‘mobile spaces’ that can cater to every passenger requirement. Imagine mobile meeting rooms, gyms/yoga studios, bedrooms, even shops! Your car journey can be tailored to your particular circumstances and this provides businesses with the opportunity to create a unique brand experience for their customer
So how will AVs affect real estate specifically? When a retailer can begin your experience from the moment that they pick you up, it doesn’t matter where the store is. If shops don’t hold stock, then you don’t need service yards. If travel becomes bespoke, then major public transport hubs become less relevant.
AVs will also fundamentally change how and where you choose to live. If you are able to make full use of your time when travelling between buildings, then you will have more choice as to where you work and play. Suddenly the maxim of “location, location, location” will matter much less. People’s lifestyles will become much more flexible and so will their choice of real estate.
For the post-car world, we are already considering the need for pick-up/drop-off areas for driverless cars in our town-centre developments and the inclusion of drone delivery ports, but soon we will need to cater for much more. We need to start planning now.