Meet the tenants of an urbanised future
Increased urbanisation over the next decade will see a rise in demand for building space, but not all property managers will benefit, says Urbanise’s Ashley Austin.
Nearly five billion of the world’s 8.1 billion people are expected to be living in cities by 2030. That’s a rise of six percent from 2019, bringing the total to 61 percent. Predominantly, the boom will be felt in the developing world, but not exclusively. Populations across Australian cities are on the rise, with Sydney and Melbourne forecast to hit eight million each by 2050.
Bordering on unsustainable, these increases will put more stress on properties and, as a result, property managers. The upside will be a rise in demand for space in commercial and residential buildings – at least, it will be an upside for some. For others, the opportunity to make the most of this growing demand is already slipping through their fingers. Why? Because they are hesitant to meet the needs of the tenants of this urbanised future – tenants completely different from any that have come before.
The new tenant
Some property managers have already met these new tenants and been left surprised by the experience. Where once they felt comfortable rejecting a tenant’s requests for increased amenities or service upgrades, safe in the knowledge that moving is a tedious and time-consuming task avoided as much as possible, they are suddenly finding tenants packing up and relocating to the building next door without a second’s hesitation. This was unthinkable only a few years ago; what’s changed?
Three drivers define the tenant of the next decade: control, choice and flexibility. These drivers are inspired by what is generally classified as the Millennial mindset – a mindset that prioritises immediacy, dynamism and innovation. If those with this mindset find themselves unable to learn and grow in one space, they move on to the next with no thoughts to cost nor loyalty. In 2020, Millennials make up a third of the global workforce and, in countries including the US, are becoming the dominant generation in offices. As they are further priced out of the housing market, they will increasingly rely on rentals in high-rises to make a home. As a result, whether or not they agree with this mindset, property managers must accept it if they are to remain viable and competitive.
Those who don’t stay ahead of the curve are doomed to be buried beneath it.
The tech solution
Not so long ago, if tenants had a problem, they would call their property manager and have to wait a day or more for it to be fixed. Nobody’s waiting that long anymore. Not happily, at least. They want to take a photo with their phone and have it upload to an operations portal automatically, knowing that the system is going to produce a work order that brings someone to their door in a matter of hours to deliver a solution.
This is one minor example of how technology is emerging to meet the needs of the new tenants of a vastly urbanised future. For some, this will seem extreme. This will seem like a premium service. And they’re right. This is a premium service… today. In the very near future it will be the norm. As will ecommerce platforms, service delivery options and anything else that can embed the control, choice and flexibility tenants are looking for into a building.
Technology is capable of meeting these needs in a variety of ways. If a property offers access to a system that can sign tenants up to the facility’s gym, connects to the café downstairs so that an employee can bring their coffee up for them and expedites their movement in and out of the car park, it’s giving them a reason to stay.
There’s another reason why technology is so important – connectivity. It’s a broad word, but if you scratch away at it you find that it underpins everything. Every touchpoint in a building is an opportunity to connect tenants to the DNA of the property and the property to provide the property manager insightful data into the tenant’s actions and needs. This data lays the foundation for shrewd management that makes the relationship between a tenant and their property manager feel intuitive.
How the property manager benefits
This all sounds great for tenants, but what about property managers?
Besides the obvious benefit of building a connection between tenants and the property, the control such technology delivers to a property manager gives them a clear advantage. Real-time reporting and analytics make quick and cost-effective management of a building easier than ever before. Where traditional practice leaves property managers compiling redundant information based on retrospective data and putting out spot fires to keep their facilities operable, technology allows for fact-based discussions and decision making that prevents issues and accidents before they happen. In such a demanding and fast-paced future, this will be critical.
Another factor set to benefit building managers is the increased visibility the urbanised, tech-driven market will create. Once relegated to the basement, building managers and their teams are becoming part of the fabric of the facility as they make their way around, tablet in hand, communicating and connecting with tenants to deliver solutions. This is sparking a shift in the relationship between blue and white collar workers that extends to executive management, who will become more likely to consider the suggestions of FMs and other individuals when determining what technology or other systems to incorporate into the building.
Don’t be left behind
Don’t be mistaken – demand for building space will increase over the next decade as more people move to cities to live and work, but it will be a tenant’s market, not a property manager’s. This influx will bring with it new wants and needs that must be addressed for a building to stay viable. If you’re a third-tier provider who doesn’t pay attention to that, you will only appeal to third-tier clients.
Ashley Austin is the global customer development director at Urbanise.
Read about Urbanise, the most innovative facilities management software in the cloud, here.