Set to change the way we live, work, and interact with each other as well as the buildings surrounding us, the fourth industrial revolution is in progress. Its path has been paved by emerging technologies and digitization. KPMG has recently published Real Estate in the digital age, a report that explores how commercial real estate occupiers are being disrupted by technological change and implications for the office buildings they choose to locate in. Although each asset class is facing its own unique challenges, the report identifies three common themes:
- Connectivity is key
- Customer experience and personalized service demand is growing
- Convenience is top priority
With regards to connectivity, Andy Pyle, Head of Real Estate KPMG in the UK says, "digital connectivity is now just as important as physical connectivity. Buildings and the people (and machines) that use them need to be able to communicate with each other seamlessly.”
KPMG has found that adaptability is a key consideration for office design and should be considered during the leasing process. Flexibility within offices to adapt and accommodate a businesses's need to scale up or down quickly, has contributed to the the rise of coworking businesses such as WeWork.
How will these occupier-led trends affect commercial real estate owners and developers? The report advises, “offices will need to be able to integrate new technologies as they emerge,” and making sure your building’s infrastructure can accommodate the internet and connectivity needs of the future will make office space more adaptable.
Many of today’s new buildings will not meet the digital needs of businesses in a decade if connectivity infrastructure hasn't been taken into account during the design or construction process. For commercial real estate to avoid expensive retrofit initiatives or building obsolescence in terms of connectivity, developers must consider how their buildings can adapt to evolving tenant requirements, and how to integrate emerging technologies.
Read more in KPMG’s report on Real estate in the digital age, including its take on Wired Certification.