Lifestyle

Property Market And Technology

Property Market And TechnologyEvery generation sees some kind of technological advancement change the fundamental way in which we live. (Admittedly the way tech has improved — or not — the developing world is another issue completely.) The automobile, commercial air travel, vaccines, CDs and VCRs (remember those?), home computing and, of course, the Internet are among the game-changers from just the last century or so. For better or for worse, the way we communicate, work, play, study and entertain ourselves has irrevocably shifted in the last decade. Now technology is changing the way we buy and occupy real estate.

Working Sea Change
The Internet and the resulting mobile communications revolution are arguably the technological developments to have had the biggest impact on the world since the Second World War. They are also an argument for public science funding. Since the launch of Apple’s iPad in 2010, the tablet and its more frequently replaced companion the smartphone, have since taken over the way we shop, consume media and, perhaps most crucially, work. Some of these changes go back to the rise in home computing, now at 11 percent penetration per capita in Asia, 82 percent overall in Hong Kong. Online shopping goes back much farther; the world’s biggest e-retailers, Amazon and Alibaba, came online in 1994 and 1999. Hard as it is to believe and as silly as it sounds, most have at some point declared, “I can’t work! My Internet is down,” for some reason or another.

Of the iPad, Knight Frank stated, “This has contributed to a reshaping of retail property, and sparked a wave of office-based start-ups that produce apps. Similarly, the popularity of e-shopping has buoyed demand for warehouses,” in its Global Cities 2015 report. “New technology undoubtedly impacts the property market, raising the question, where will change come from next?”

Retailing is at the front of the wave as it’s long been most visibly impacted by technology. Shopping centres and high street stores alike are increasingly being compelled to reshape the business model into something more than pure shopping. “We may find retailing involves more experience and a lot less ‘stuff’,” predicts Yolande Barnes, director of Savills World Research. Analysts like Colliers International and Jones Lang LaSalle among others have already theorised that industrial and warehouse real estate will continue to be the smart investment in 2015, as logistics, while always important, is one of the few commercial sectors sure to hold steady in the future. Both traditional and online retailers need industrial space, for storage and shipping as a start.

But technology could make its presence felt in so-called real shops too. Addressing the MIPIM international trade conference in December, Hang Lung Properties Chair Ronnie Chan wove a story about a day that may not be too far away when a tablet could wholly reinvent the way, say, we dine out — what with menus and waiting times available at a touch. Chan, however, doesn’t think traditional retailing has no future; it’s just a different one. Echoing Barnes, Chan notes the consumer experience as enabled by tech is key. “We have to think about what experience shoppers have in order to retain them. Overall I think shopping centres are a very good business. I know people have said shopping malls are a thing of the past. I say think twice. When computers came out they said the paper industry would be history. The airline and the automobile faced the same thing. People are still social animals. Would you like to watch a TV screen with a beautiful woman having coffee or would you like to be at Starbucks watching a lady right next to you?”

Not Just Digital
But technology extends well beyond the web. The pace of tech development is astonishing, and there is other hardware looming on the horizon that just a few years ago seemed like science fiction. Some of the more notable technologies Knight Frank pointed out included robotics, drones and 3D printing (first developed in 1984). Robotics already exist (think auto manufacturing) but Knight Frank pointed to telepresence robots for remote workers to facilitate “real” interaction as well as service robots for offices. The impact of more robots in the office means a demand for more storage and charging space. That can be taken from the area previously used for cabling as the so-called “Internet of things” and smart homes and offices become commonplace. Big industrial spaces will still be needed for assembly even with 3D printing, but, “In R&D and specialist manufacturing, 3D printing is having an impact, bringing down costs on short production runs. Consequently, we could see a wave of ‘start-up’ manufacturers offering bespoke or specialist goods, generating more demand for light industrial units,” theorised Knight Frank.

The easily accessible elements are already in play. The corporate environment is changing and that’s having its own impact. “The thing about technology is that it never impacts [us] the way people thinks it’s going to. Technology in the ’80s was on everybody’s lips and offices were designed with those things in mind — the way computers worked at that time. People were still thinking of trading as person to person, that also used computers, so you had to accommodate all those people and all the computers with all the trunking,” argues Savills’ Barnes. “How it turned out of course is completely different. Technology changed the nature of that box, the way you worked. Technology makes traditional streets important again.”

Some of that is visible in Swire Properties’ latest experiment with blueprint. Opened in mid-January, the blueprint offices span two unused and totally redesigned floors of Cornwall House at Taikoo Place. The project is a professional development hub for up to ten tech-based start-ups and an affordable office alternative for existing small tech businesses that might like a prestige address and its facilities. Blueprint is an exemplar of the modern office: heaps of natural light, polished concrete floors, sprawling, communal pantry space and no partitioning walls, save for meeting rooms. It is not something Swire could have done five or ten years ago. “[These] floors are both BYOD — bring your own device,” agrees Charlie Melvoin, blueprint’s project leader. “The ability to have affordable iPads and computers, in terms of the design of the space, [allowed us to accomplish] more than what we’ve been able to do before. I don’t know that it was a determining factor but it certainly enables the kind of hotdesk workstations and mobility to facilitate this kind of [endeavour].”

The space at blueprint is not officially a pilot programme, but Swire will be looking carefully at how it works for its future developments. New tech’s influence is crucial. “Absolutely. It forms part of our forward-looking mindset,” says new Swire Properties’ Chief Executive Guy Bradley. “We think about those kinds of questions when we redevelop buildings and recreating things like Taikoo Place. Going forward it will be a fundamental part of that.”