Space as a Service : The Future of Corporate Real Estate

Corporate real estate is experiencing a structural shift as it transitions into the ‘Space As A Service’ model.

“The real estate industry is no longer about real estate. Businesses don’t want an office: they want a productive workforce. Traditional real estate is a product industry. The industry is moving from where we sell a product to a service industry where we sell a service. This will have new customers, competitors and different modes of occupation,” says PropTech consultant Antony Slumbers.

He was speaking at the 6th annual India conference organised by CoreNet Global, a professional association for the Corporate Real Estate (CRE) industry.

According to him, the nature of work is changing, and structured, repeatable and predictable work will be automated. The new paradigm of work now encompasses design, imagination, inspiration, creation, empathy, intuition, innovation, social intelligence and judgement.

A 2017 McKinsey report estimates that 49 percent of the activities that people are paid to do in the global economy have the potential to be automated by “currently demonstrated technology.”

“We are now, 59 years later, at the end of ‘Office as a Spreadsheet.’ The office designed for old work is obsolete. Offices have to be designed for new work,” he adds.

Winston Churchill once famously said, “We shape our buildings, and afterwards our buildings shape us.”

“The Build-Measure-Learn cycle is the default in the tech world, however in traditional real estate we stop at build. Workplace as a service is a conflation of hardware and software and services,” says Slumbers.

A 2018 report by Colliers International finds that 56 percent of Asia’s top 200 occupiers are already using flexible workspaces in some capacity, and 91 percent are considering using them.

In his book, AI Superpowers, former Google China president Kai-Fu Lee writes, “AI algorithms will be to many white-collar workers what tractors were to farmhands: a tool that dramatically increases the productivity of each worker and shrinks the total number of employees required.”

“Surveying appears to be an industry in which 88% of the core tasks are ripe for automation to a greater or lesser degree,” reads a RICS report on “The Impact of Emerging Technologies on the Surveying Profession.”

Participants at the event dealt with two distinct areas where CRE trends could be observed: the development of inclusive, technology-driven workplaces and the dynamic demands placed on workplaces as a result of talent evolution. Panelists cited their industry experience to elucidate the evolution of the workplace from its traditional avatar to one that is constantly changing basis the demands raised by succeeding generations of the talent pool. The pace of these changes calls upon greater collaboration between various stakeholders both within and outside the CRE ecosystem to devise incisive solutions to existing problems. They also call upon firms to invest in measures that utilise predictive analytics to circumvent impending problems and help add to the existing set of strategies for the greater good of the industry as a whole.

Speaking about geopolitical trade tensions reshaping corporate real estate in a global economy, Tim Armstrong, Head of Occupier Business Development, Asia Pacific, Knight Frank said that a lot of people looking to shift capital from Hong Kong and that a lot of companies that have Chinese operations but aren’t Chinese are looking at moving out.

“The expansion of the corporate real estate industry has seen factors beyond infrastructure become crucial elements to consider. The CRE ecosystem today has shifted towards the adoption of an employee-centric perspective, both while creating office policies and while choosing office spaces. The scenario in India has changed drastically in the recent past and companies must look to integrate the advantages that technology provides to deal with both present and future concerns,” said Sathish Rajendran, COO at Knight Frank (India) Pvt Ltd and Co-Chair of the India chapter of CoreNet Global

“Digital transformation has brought in many changes across industries and the CRE space has not been exempt from this disruption. The ability to adapt to a dynamic corporate real estate environment has led to India being considered as a potential global business and financial hub. CRE professionals are at the core of achieving this potential and it is imperative that this space be integrated with and supported by Infrastructure functions to power a more human experience at the workplace. In time, the adoption of strategies are sure to make a telling impact on how we look at corporate real estate today,” stated Arunabh Mukherjee, Facilities Head at Synopsys (India) and Co-Chair of the India chapter of CoreNet Global.