The sky´s the limit!

Working together to design commercial real estate for smart ecosystems – the name of an event organised by Bosch Energy and Building Solutions to which I recently had the pleasure of contributing, merits attention in several respects. The most important word comes right at the start: together. The challenge of creating modern commercial real estate – with inspiring working environments – can only be overcome if diverse players work together. And this cannot be accomplished in an exclusively analogue environment or an entirely virtual space. Smart ecosystems are needed in every respect. But first things first...

Clear focus

I gave my talk the title “Verticalising the real estate industry”. What does this mean? We know that vertical integration lets us dive deeper into the value chain, while horizontal integration lets us explore factors such as the breadth of various services. Both ways enable us to tap target groups that we have not reached before. But is this enough? We have observed that this understanding of verticalisation falls short of the mark, since it does not take account of societal requirements. Instead, we should see verticalisation as a gateway to brand new value chains and business models. However, this requires a change in thinking at various levels, as the following suppositions show:

1) Approach: verticalisation

First and foremost, verticalisation means breaking up existing structures, roles and responsibilities. The real estate industry claims to be doing this, but there is little evidence of it in practice.

2) Approach: users

The real estate industry has taken property users for granted – even marginalised them – for far too long. The tenant was (and in many cases still is) seen as the most important customer, and all the attention is directed towards them. It is the tenant who signs the contract and is responsible for how the space is used. However, advances in digitisation and the effects of the pandemic mean that the real estate industry must radically change its thinking. Users are becoming the standard by which everything is measured.

3) Approach: added value through data

Data, data, data – the real estate industry is one of several that have been chanting this mantra for some time. It goes without saying that our industry must retain its sovereign power over the data generated by real estate – or gain control of it in the first place. However, generating “good” data means making users the focus of all our efforts. As matters stand, the verticalisation of the real estate industry is often driven by the wrong motivation.

Changed thinking

What we can take away from these approaches is that we have to...

... break down old ways of thinking...

... make users the focus of our attention in their capacity as customers, and...

... use them as a standard by which everything is measured, thus creating a perfect model for a digital ecosystem – a platform on which we can both address users of offices and other commercial real estate and enable all other real estate stakeholders to interact.

Incidentally, “digital” does not mean that everything takes place virtually. The property itself, the hardware installed in it and the hardware that will be installed in the future – these are all elements of new services and help make up a new concept of value creation. This does not begin at the entrance to the office complex, neither does it end there.

Hybrid work routine

The user’s journey does not start when they get to the office, but rather at home or on their way to work, when they are planning their working day. It is becoming increasingly important to connect with them at these times, because although we will be spending less time at the office in future, the time we do spend there will be all the more valuable. Booking a single-occupant office to concentrate on work in the morning, organising lunch with colleagues at the restaurant around the corner, and reserving a suitable room with all the resources needed for the workshop in the afternoon – all these tasks require suitable tools. Neither do users “shut down” when they leave the office. Their thoughts accompany them a long way, all the way home – and vice versa. This means quite simply that commercial properties have to open up to their environment.

Conclusion: Real estate is a key component of a smart digital ecosystem – nothing more and nothing less. Market players will have to decide whether they want to function as ecosystem suppliers which merely contribute the shells of buildings, or whether they would rather make an active contribution to the ecosystem and thus participate in it.