If we can be sure of anything right now, it is that the world is experiencing a period of dramatic change – and that applies as much to the UK property industry as anywhere else. After all, while many of the issues facing real estate may be global in scale, they are also local in terms of impact.
For instance, ten years out from the meltdown in 2008, the effects of the global financial crisis continue to be felt. As a consequence of low interest rates and quantitative easing, a flood of money found its way into property markets in world cities, not least London, with the result that yields for traditional assets both compressed and converged.
In response, investors looked beyond the core markers and to alternative asset classes in the hunt for income-producing investments. The trend shows no sign of abating even if, as is expected, interest rates slowly begin to rise. Indeed, it is an open question now as to whether ‘alternatives’ remains a valid term from a taxonomic perspective. These formerly fringe sectors now seem very much mainstream.
Then, of course, there is Brexit. The ultimate implications of the UK’s decision to leave the EU are as yet unknown, especially when it comes to whether multi-nationals will decide to move operations abroad. However, the weakness of Sterling means that UK investors are struggling to compete with their foreign counterparts due to the continuing exchange rate advantage.
But the trends currently facing the UK property industry are not just economic. Demographic and social changes too are driving transformation. The UK has an ageing population and that is having a profound effect on property requirements, most obviously in the residential sphere. And then there are the millennials, who have very different ideas about what the world of work should look like, as well as differing housing needs to previous generations.
Finally, of course, there is digital transformation. Retail, as has become painfully evident this year, has felt the full force of digital disruption – the rise of online shopping, always on connections and same-day delivery has changed retail and logistics and ways that have yet to be fully realised.
That is just the beginning. The potential of machine learning, robotics and AI to automate vast swathes of process-driven employment will have profound consequences for the occupier market. Given the current pace of innovation, those implications are, from a property industry perspective anyway, just around the corner.
These digital and social transformations have put people firmly at the centre of property. The end user is now king and in this fast-paced world standing still means falling behind.
However, where there is change, there is opportunity – and that is exactly what MIPIM UK 2018, now in its 5th year, aims to identify. Over the course of two days, the conference will showcase the innovators leading property into this new world; the disruptors challenging the old business models and ushering in new; and the game-changers setting new parameters for the real estate market.
Investors will discuss those geographies and asset classes where they see most opportunity; occupiers will share their strategies for facing up to new challenges; developers old and new will discuss how the business of creating places has never been more challenging – or inspiring. Bold and ambitious new city mayors will present their agenda for change, notably in terms of infrastructure and housing; and proptech innovators will show us that the best way to predict the future is to invent it.
The event will, of course, acknowledge the challenges that change is bringing, but it will also confront that change with vigour and confidence. As the great science fiction author Issac Asimov put it back in 1981:
“It is change, continuing change, inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be…”