The first half of 2017 has already held some surprises that will impact commercial real estate. Lamudi—the global real estate platform—picks out five trends that will shape commercial real estate in the future.
1. Airports will be hassle-free
The airport of the future will allow free and easy movement of passengers. As technology progresses, airport security will know everything about you, and this will eradicate the need to scan people constantly, and the toll-booth delay will disappear. In the not too distant future, all passengers will be identified with fingerprints, iris, or face scans and this will reduce the time it takes to move through security. Airports will try to boost their income by offering better amenities such as shopping malls and entertainment. New business models are likely to include commercial office space. Multinational companies may even decide to open a global hub right inside an airport given how easy it would be to fly executives in and out for global meetings.
2. Technology will do 90% of the work
A report titled The Impact of Emerging Technologies on the Surveying Profession predicts that brokers and appraisers will have a lot less work to do in the future. Surveying—the term used for leasing and investment brokers, property managers and valuers—is ripe for automation. Tasks such as rent collection, the examination of financial information, property valuation, and monitoring market conditions are predicted to be completed with the help of artificial intelligence and deep learning.
3. More investment in the emerging markets
The emerging markets are fast becoming the motor for global growth. Presently, the emerging markets are outperforming developed economies with unrivalled growth charts that have resulted in impressive job market expansion and a lowering of unemployment rates. This employment growth has fueled a rise in demand for office and commercial space. In the Philippines, in Q1, six office developments were completed adding 113,000 sqm of office space in the capital Metro Manila. Impressively, the average vacancy rate is as low as 4%. Expect commercial real estate investors to turn to the emerging markets to pick up the slack from developed markets.
4. Unbanked lending will develop further
Alternatives to bank loans will continue to gather momentum. In countries like Mexico, peer-to-peer lending targeted at the underserved/unbanked population will prosper and bring more home buyers into the market. Customers searching for lower interest rates will also be tempted by the more favorable rates on offer by non-traditional lenders.
5. Agility will shape the market
According to a recent report by JLL, 20 million people are using third places for part of their working week. The Starbucks effect means that by 2030 30% of corporate portfolios will comprise flexible workspace by 2030. Real estate is fixed and immovable, and the perception is that it is slow to accept change; then there is technology which is the opposite. Speaking about investors, corporate tenants or developers it is technology and people at the core of everything. Thus, it is high time for the modern workplace to meet the flexible needs of the 21st century.