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 Tech and cultural shifts changing the face of property

 

  While the ebb and flow of economic cycles continue to exert its influence on the property market in predictable patterns, longer-lasting changes are taking place due to cultural shifts and the technological revolution that we are living through, says Stanton Naidoo, executive general manager for property and asset management services at Business Partners Limited.

The trend towards green buildings is a good example of where mutually reinforcing cultural changes and technological advances have begun to impact property in very tangible ways. Increasing numbers of the workforce are environmentally aware and find it desirable to work in environmentally friendly buildings, giving landlords who use technology to green their buildings an edge in the market, says Stanton.

Green technological solutions are being retrofitted onto existing buildings, including ever-cheaper solar panels, and energy efficient lighting and air-conditioning systems. New developments, meanwhile, are increasingly designed according to environmental principles, allowing natural light and airflow to cut down on operating costs.

Another cultural shift that is impacting on property, specifically office space, is the preference of the new generation entering the workforce for private workspaces.  Generation Z, as Stanton calls the current cohort of graduates and school leavers who are starting their careers, are less comfortable with open-plan shared spaces that the previous generation experimented with. Building managers and landlords can expect an increase in requests for the closing off of offices into private spaces.

The individualistic impulse that underlies this need for more privacy in the new generation may well have its roots in the social media revolution, which itself is bound to have a profound impact on business property in varied and unpredictable ways, says Stanton.

One change that has already taken hold is the installation of fibre-optic cables, which is fast becoming a standard feature for almost all business properties.

Online shopping is continuing its relentless creep on the market share of traditional retail, says Stanton, and owners of retail property will have to keep a careful eye on how the trend will affect the value of their assets.

Although the long-term effects of online retail are too difficult to predict, Stanton believes that there will always be a need for physical retail space where consumers can feel and hold the goods they want to buy, or simply browse in a tactile way.

Shops may become more like service centres where consumers come to check and pick up the goods that they have ordered online, he says. It is also likely that the shop-front retailers who will thrive in the new environment will be those who can offer their clients an experience rather than just a bland warehouse-type displays of goods.

As much as online retail is eating away at the market share of traditional retailers, bricks-and-mortar shops are using social media to advertise and draw customers in. Stanton believes that the tenants and landlords who embrace online technology and integrate it into their offering are most likely to survive in the physical retail markets.

The rise of online retailing has certainly not helped the oversupply of retail space in South Africa, says Stanton. Sensible developers will only venture into a new shopping centre if it is based on thorough market research and where it will fulfil a very specific need, or where it is built specifically to replace an older, smaller adjacent shopping centre.

Another technological and cultural wave that is bound to shape commercial property in future is the ride-sharing phenomenon, led by the likes of Uber, Lyft and Taxify. Again, it is difficult to predict the full measure of its eventual impact, but one likely outcome is a decrease in the need for parking space. Business property owners should start considering alternative uses of what might soon become surplus parking, says Stanton.

Property owners can also start thinking about the installation of charging points for electrical vehicles, which could become a feature of nearly all business properties - retail, office and industrial.

It might seem a bit early, but in a world of fast-changing technology and culture, landlords have to remain alert to grow the value of their properties.

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