The future of real estate: 6 tips to keep your real estate investments future-proof

As a real estate developer, you’re designing and constructing the real estate of the future. As a property investor, you want to invest in assets for the long term. Yet, what will that ‘long term’ and ‘future’ look like? Just like in every industry, a series of global trends like urbanization, changing demographics, digitization, customer centricity and climate change are changing the face of real estate. How do you adapt to these changes to future-proof your investments? Check out our 6 tips.

TIP 1: Invest in mixed-use property development

With more than three-quarters of the world’s population now living in urban areas, city space has become scarce – hence the rise of mixed-use – a.k.a. hybrid – property. By blending living, working, recreation and culture in one, single building, developers or owners can optimize the use of space and infrastructure. Moreover, hybrid real estate protects investors in case there is a downturn in one segment of the market or another: if retail slows down or offices disappear, then there is still cash flow from residences. Last but not least, mixed-use property makes life more enjoyable for residents and office workers alike, while reducing the need for cars, as a variety of different living activities are within walking distance for most residents.

TIP 2: Prepare for the rise of satellite offices

As more and more employees experience the benefits of shorter commutes and telework, organizations understand they have to reinvent their office spaces and work policies if they want to keep attracting talent. Combining their headquarters – maybe even reducing office space there – with one or several satellite offices is often a good way for organizations to offer their employees the flexibility of working closer to home while ensuring their staff remains connected to their organizations.

TIP 3: Meet the growing need for value-added services

Today’s consumers – particularly millennials, who buy the bulk of today’s real estate – have become more empowered and demanding. They want great places to live and work. To attract more buyers or tenants, property developers or owners can offer additional perks or provide well-thought-out amenities. Opportunities abound, from discounts on streaming services, telecom, nearby restaurants or shops, smart home technology, workout areas and babysitting or cleaning services to electric vehicle (EV) charging stations, e-bikes or delivery points for e-commerce.

TIP 4: Embrace PropTech

Real estate has long been a ‘traditional’ sector that has been fairly resistant to change. This is no longer the case. Driven by the high expectations of tenants and residents, real estate is undergoing a digital transformation and increasingly embraces PropTech – property technology.

 Just look at how smart building technology allows facility managers and residents to cut energy consumption and create more comfortable living and working conditions (ventilation, air conditioning, lighting, security, access management). Or, consider how smart parking technology, combined with cloud and edge computing, ANPR (automatic number plate recognition) cameras and digital payments, helps improve the parking experience for tenants and makes life easier for facility and property managers.

Think integration and ecosystems, not silos

There is a lot of exciting, user-friendly PropTech technology around for diverse applications. The key to future-proofing your investment in PropTech – and, hence, in your property – is to integrate the technology used to manage mobility with building management. Just like cites are transforming into smart cities, which integrate multiple information and communication applications to become smart cities that improve quality of life and efficiency of services, the real-estate industry has to break down silos and think in terms of smart ecosystems.

TIP 5: Build in sustainability

With buildings accounting for around one-third of the world’s global greenhouse gas emissions and 40% of the world’s energy consumption, the real estate sector has a serious impact on climate change. Forward-looking real estate developers, investors and other stakeholders understand the importance of sustainability. More than optimizing energy-efficiency and choosing eco-friendly materials, this also means paying attention to well-being, i.e. developing property where people enjoy living and working. Location and mobility play a big part in this. As cities increasingly ban cars to make downtown areas greener, cleaner, safer and quieter, real-estate developers should look for ways to balance parking zones with EV charging stations, space for (shared) electric cars and e-bikes, etc.

TIP 6: Never underestimate the role of mobility

The future of real estate is invariably linked to the future of mobility. As cities outgrow cars and millennials increasingly prefer sustainable transport options, you might need to think about converting your car park into a mobility hub that accommodates new types of transportation, like (e-)bikes and (e-)scooters, lanes for shared cars and taxis or drop-off zones. Alternatively, you might want to rethink the location for new development projects.

Learn more about the future of mobility? Explore our insights.

Conclusion: the importance of an ecosystem

The future of real estate is largely impacted by today’s megatrends of urbanization, sustainability and digitization and intertwined with the future of mobility. Real-estate companies that want to ensure that their properties remain relevant in the future have to invest in sustainable, mixed-use buildings, provide extra services and harness the power of digitization. Close collaboration within the real-estate ecosystem – between real-estate developers, investors and agents, PropTech companies, mobility experts, municipalities, etc. – will be key for the sector to smoothly embrace that change.