Boris Johnson has signalled that the current work from home guidance for England is to be lifted next month, if Covid-19 cases continue to drop, raising the prospect of an imminent return to pre-pandemic workplaces.
It remains to be seen how working patterns will change post lockdown but, according to the FT, the civil service is preparing for officials to return to their Whitehall offices from the end of June, ‘albeit on a more flexible “hybrid” model with more homeworking than before.’ Opinions remain divided on whether and to what extent the private sector follow this model.
These issues were aired in a conversation between Dror Poleg, author of Rethinking Real Estate and Ryan Simonetti, Founder and CEO of Convene (both Propertyshe podcast guests) using the snazzy new Convene virtual events platform. As anticipated, there was an insightful discussion between these top real estate influencers around the future of work being hybrid, and how you build the digital extension of your physical office.
And of course, what does this mean for landlords and service providers? Poleg commented that until recently the individual was absent from the workplace discussion. He said, we are now moving towards the consumerisation of the office with city centres competing with the suburbs for workers.
He sees the office of the future as ‘a network of solutions’ and points to the hotel sector as giving a road map for offices. Brand, he said, will be more and more important and landlords will choose which ‘flag’ to go with. Poleg said he was most excited about flex, coworking and coliving, which he admits are not new, but he sees as the biggest opportunities.
Which takes me to my recent interview with serial entrepreneur Brad Hargreaves, Founder and CEO of leading US coliving business Common, who as he told me are looking to expand to the UK and Europe. Common was set up in 2015 to fill the gap between the housing that was being built and the quality affordable housing that was needed. They are growing fast with 6,000 units under management and 20,000 in the pipeline.
Common now has two additional brands, Noah which targets workforce (key worker) city housing and Kin (recently rebranded as Mily) which provides homes with facilities and services for families with children. Notably, Common chooses to be an operator, partnering with property owners and developers, and not a developer. ‘That would be competing with our customers!’ says Hargreaves definitively.
The success of Common demonstrates the key role of technology and economies of scale in centralising management. There are some great insights and, like Poleg, Hargreaves emphasises the vital importance of investing in brand. As Hargreaves told me, the US ‘massive’ build to rent sector comprises 50 to 60 million apartments, so Common can see the opportunities presented by the UK’s ‘nascent’ build to rent sector.
Thank you to PERE Global Summit for inviting me to moderate their EMEA panel on technology and the future of the built environment. Panellists Roelof Opperman of Fifth Wall, Ronen Journo of Hines, Ilkka Tomperi of Varma Pension Fund and Dr. Florian Ehrich of Morrison and Foerster provided their views on the impact of technology, the practicalities of hybrid working and whether property companies have the scale to provide the services that customers are now demanding. Sustainability and health and wellbeing were identified as increasingly key.
The panel looked at the implications of all these trends for real estate investment strategy. Underlining the rise of Common and comments above on coliving and the residential sector, Opperman flagged residential as ‘a huge opportunity.’ And, as Journo pointed out, we do need to change our language as tenants are customers and we need to treat them as such!
Since the need to repurpose obsolescent buildings and the resultant challenges came up for discussion by my panel, I was delighted to see a novel new use on the horizon, which is likely to appeal to a real estate audience. The Evening Standard reports that a life-sized ‘live performance’ version of Monopoly is coming to London’s West End.
The immersive show which will take over the three storey Paperchase building on Tottenham Court Road is a mixture of escape rooms and the classic board game where players can go to jail or win on the turn of a chance card. Players are led around a giant Monopoly board with each property square including a room with its own challenge to test physical and mental skills. There will be a shop offering merchandising opportunities and a Monopoly themed bar and restaurant.
Hopefully, this is just one example of the new wave of experiential, immersive retail we can look forward to.
Congratulations to the IPSX team, and to founder and former chairman Anthony Gahan! After years of hard work, and delays resulting from the turmoil of Brexit, followed by the pandemic, IPSX , the world’s first regulated stock exchange for commercial real estate investors to buy and sell property shares in asset backed securities has finally launched with Birmingham’s Mailbox as its first listing.
This office-led mixed-use property anchored by the BBC has been rethought in the light of Covid-19 with half of the retail being converted to flex offices operated by IWG’s Spaces brand. The asset is managed by M7 Real Estate whose chairman Richard Croft commented that ‘real estate is ripe for disruption’.
This certainly is disruption as, for the first time, FSA regulated IPSX offers an alternative way of investing in commercial real estate with instant liquidity and price transparency. The Mailbox is apparently the first of a pipeline of assets to be IPO’d so look out for further listings.
Finally, if you aren’t able to book an overseas holiday because of ever changing Covid-19 restrictions, what about a round trip to take advantage of tax free shopping. Destination-less flights on which you can buy your duty free luxury goods have been launched in the Far East in an attempt by duty free operators in an attempt to salvage their industry which has been severely impacted by COVID. Is this something we should be considering in the UK?
Susan Freeman is a partner at Mishcon de Reya