Change… or just diversification?
In the second of our Summer Perspectives focused on the topic of change, I thought it would be useful to consider how change is affecting the property industry as a whole. The previous Perspectives looked at how climate change is resulting in more extreme weather events, which in turn presents new challenges for all of us concerned with the built environment.
If we agree that change itself is constant, it seems to me, without getting too metaphysical about this, that what we are actually witnessing is diversification.
This kind of change is sometimes difficult for us as individuals to process. Especially if we work in an industry – property – one of whose main characteristics is sometimes, and this is not necessarily a bad thing, inertia. Take the London commercial property sub-markets: for decades they centred on just two major poles: City and West End. Even when Canary Wharf rose from the docks it was seen as something of an isolated interloper.
Compare that with the London of 2022, where Stratford, Midtown, Canada Water, Paddington, Wembley Park, the South Bank, Chiswick Park and many more locations are recognised as bona fide addresses. This change (and many others like it) is fundamentally based on diversification. What is noteworthy is that this particular diversification of the market took place relatively quickly, as did scores of other types of changes in industry.
Working from home, flexible leases, new tech, ESG considerations, the metaverse and, of course, that most recent humdinger Covid-19 are all certainly factors of change. Yet they are also frequently held up as evidence by those who would like us to believe that changes are happening more rapidly than ever before, exponentially even.
I’m not so sure. If we agree that change itself is constant, it seems to me, without getting too metaphysical about this, that what we are actually witnessing is diversification. Change isn’t taking place any more quickly (or slowly, for that matter) than it ever was. Bear in mind that the smartphone (as we archaically called it from the start) has only been around 15 years.
That’s not to say that the effects of diversification on the property market aren’t profound. I think they most certainly are, and, actually, that’s what makes 2022 an exciting time to be around. In the same way that the London sub-markets have blossomed, town centres across the UK have become hugely more diverse as mono-development has been replaced by truly mixed use schemes. Similarly, investors have become more open to considering new asset classes, as the acceptance of PRS, Life Sciences and student housing has demonstrated, with further examples just around the corner.
The changes we are witnessing at the moment are likely to have a significant impact on how and where we work and live in future. Flexible working practices and a new perception of offices are just two key factors likely to determine future physical development.
The diversification that is taking place as a result of change in so many parts of our working lives is – I’m not going to duck this one – challenging for the best of us. We are having to learn to how to think and do things differently and learn new skills. Diversification in the property market is, I believe, a positive change, creating new opportunities and allowing us to grow and develop as individuals. It is also creating demand for even more specialist expertise and advice to clients in lots of emerging new locations and property sub-sectors.
I choose to see all of this as a good thing. It’s how we improve things for the better, how we evolve.
That theme of evolution, as we consider how individual towns exploit their own ‘DNA’, will be continued in our next Perspectives...
Article by Thomas Rose, Co-founder P-THREE
Photo credits: Unsplash
