Why and how should real estate improve the focus on being customer-centric
The retail trade has known for a long time that the customer is king. But as the wider real estate world wakes up to the importance of a customer-centric focus, a revolution is inevitable across all property sectors, industry experts say.
“Today’s tenants have a broad range of compelling space options to choose from. Landlords are quickly realising that to avoid losing them – and their revenue – building ongoing relationships is key,” says Charlie Wade, UK managing director at PropTech firm VTS, the brains behind an innovative leasing and asset management platform which places tenant information at the push of a button. VTS tech is now being used across 10 billion ft2 of real estate worldwide, enabling landlords to become more customer-centric, according to Wade.
As innovation like this proliferates, office management may never be the same again, says Peter Hensby, a regional director in JLL‘s EMEA office capital markets team.
“At the moment we are doing a lot of work with larger companies on their global portfolio to help them future-proof their buildings. While this revolution was probably tenant led, ultimately, it’s becoming a landlord issue as well, to attract the right occupiers,” he says.
Customer-centric flexible space
Flexible office space has become a driver of the customer-centric approach, notes James Nicholson, a partner in Knight Frank’s strategic consulting team. “Modern providers of coworking space have led the march towards what can be broadly termed “space-as-a-service”,” he says. “We believe that this phenomenon will be at the centre of how business is done in the real estate industry moving forward.”
The numbers underline the trend: in London alone, flexible working locations grew by 42% in 2018, as 155 new business centres opened, according to a report from Office Freedom. And it’s not just the usual suspects: even Moscow is expected to see the launch of 15 major co-working projects this year, says Colliers, generating some 46,000 m2 of new flexible space.
The brands have become as big as the business, as global names like WeWork and its peer Knotel achieve rapid growth. For Patrick Nelson, EVP, head of real estate, WeWork EMEA, a customer-centric approach is making all the difference.
“Our members are at the heart of everything we do. When choosing a WeWork market and location, we think about it from our members perspective — in fact, oftentimes we determine new-market entry by the number of requests we’ve received for a certain city or neighbourhood – so it all begins with what our members want,” Nelson says.
“Once we’ve chosen a location, the design, technology, and community teams we put in place are all geared toward creating dynamic communities for our members. In fact, we’re increasingly using data from our current buildings to inform how we select, build, and iterate on our future locations.”
Matching user expectations
But the traditional office market and the residential sector are also seeking new ways to serve tenants. In the wake of the green building revolution, the latest PropTech movement is about matching user expectations.
“One of the emerging trends is the rise of ‘experience apps’, which look to help space providers better engage with their customers for day to day comms, marketing, and promotion of local offers and events,” adds Nicholson. “The main challenge for these app providers as adoption increases, is maintaining the ongoing engagement of the users – if they can do this, they will become industry standard and a great source of data for landlords.”
Workwell, a commercial property services app which came second in MIPIM’s third Startup Competition last year, has been going from strength to strength since taking centre stage in Cannes, according to founder Marie Schneegans. “Being a winner at MIPIM last year was the turning point for even bigger successes,” the 25-year-old entrepreneur explains.
Workwell, which allows building services and community experiences to be centralised in one app, was forged from the experiences of its Millennial-founder while she was working as an intern at Swiss bank UBS. “I initially created an app, Never Eat Alone, to counteract a corporate environment which made informal networking really difficult,” Schneegans says. But when a real estate partner stepped up, in the shape of Unibail-Rodamco-Westfield, the app got an upgrade: becoming an all-in-one place to book a meeting room, turn on a light, reserve a yoga class – and find a buddy for lunch. “Our goal is to be the standard in this market,” adds Schneegans.
“We were initially inspired by the open-platform technology of China’s WeChat, which allows its users to do practically anything. It also enables small companies which are not particularly connected to become digital. With Workwell, you can travel across a company’s offices, picking up services in different cities and countries. We’re now expanding by working with property firms who are looking at using it across their entire portfolio.”
That the app was essentially forged by a Millennial for Millennials is no coincidence. Employers have realised they are increasingly talking to a young workforce which holds a smartphone in one hand. Tech has become central in the battle for attracting the best. “Over the last five years there’s been much more focus on the workspace experience and its role in retaining talent,” JLL’s Hensby confirms.
As innovation coalesces around customer satisfaction, talent retention and ultimately, higher revenues, focused networking has never been more vital. The conversation continues at MIPIM PropTech Europe, where 1,000 companies and 200 speakers from 40 countries will convene to discuss the future of the industry, identifying the PropTech champions of tomorrow.