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The concept of real estate as a service is redefining the future of real estate, but its success requires a shift in mindset. Stakeholders will move from seeing real estate as just a physical wrapper of bricks and mortar, and instead will need to reimagine the value of the package of services that real estate can enable. This key trend within Africa's real estate markets is the theme of the API RE: X Africa conference.
"Although real estate itself is a physical product, the use of real estate is an experience. This means that how we deliver and utilise real estate is rapidly evolving away from an ownership model and more towards a consumption model," says Jess Cleland, COO of Broll Property Africa, whose opening address "Real Estate as a Service", highlighted strongly that real estate users need more than just a space, they need an environment of services within that space.
"Just like a chocolate bar," said Cleland. "The wrapper might provide a function, but that's not why you consume it - the real value lies in the experience you get out of it. Similarly, we are seeing a shift in how real estate is packaged, delivered and used. It's no longer about ownership, it's about having access to utility with the benefit of flexibility brought about by lower barriers to entry and being able to more quickly scale-up or -down depending on needs.
"What we are adapting to, in a relatively short period of time, is embracing an ecosystem of services in a variety of locations and experiences. This is blurring the lines between work, home, play and learn, and is being enabled by technology as a catalyst, which often acts as a marketplace connector."
In support of her presentation, Cleland produced an array of research undertaken by Broll Property Group's global affiliate, Cushman & Wakefield, around the needs of people who are today, looking for a more shared economy where co-living, co-working, and hybrid working systems are fast replacing traditional real estate usage.
"We have witnessed a clear breakdown in the delineation between work and home spaces, and even within other sectors like healthcare, which is moving closer to the communities that it serves. This means that real estate must become more flexible and accessible. No longer are people tethered to where they work or live; they are instead seeking an inter-connectedness of services, where they can tap into the range of experiences they wish to have - and most importantly when and only when they need it."
In support Cleland mentioned examples of emerging global trends, such as pop-up office pods, which are rented by the minute; senior living where services like medical and social are wrapped into an estate package; cloud kitchens which service many food brands for delivery only, without a physical restaurant; and co-working or co-living where users combine the benefits of exclusive use of some spaces with access to shared spaces and services. "This means that the barriers to entry in real estate are being broken down and manifesting improvements to economic and social effectiveness."
"The question is no longer around what physical space people need, but what enabling environment will support their best performance. This is going to change the traditional real estate model as new operators rise to provide services that fill the gap between what users need and what owners provide. All stakeholders must think carefully about what they need to succeed in this new world, as the true value of real estate will be its ability to holistically deliver convenience, flexibility and wellbeing."