Property investors could have just two years to get used to the idea of using cloud-based sharing applications and robotics, with the rate of technological change expected to speed up “significantly” in that time.
Hawke’s Bay commercial and industrial property owners have also been urged to consider how changing business models could impact their own businesses, as more disruptive changes occur, upsetting the traditional way of doing business.
Frank Spencer, director of Logan Stone, a Hawke’s Bay-based property specialist and valuation firm, said one reason for that was down to the demand for office space, which was diminishing on a “per area per employee” basis.
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“The other aspect of technology, is businesses are no longer certain about their medium and long-term future so they want more flexibility. From a property point of view, tenants are likely to want to own fit-out and change a building around internally so investors are more likely to invest in just a shelter and the bare-bones structure of a building.”
Property investors would be responsible for buying land and establishing and maintaining a building shell, with the tenant doing what they required within the shell, both for their needs now and into the future. They would need to accommodate their changing operational requirements, size and even their branding.
“This is something we need to look towards in Hawke’s Bay,” he said.
“With a lot of our investment properties here, it simply is a question of ‘what is the rent like?’ There’s not a lot of consideration being put to into from where that rent is derived.
“Occupants will be accelerating the depreciation of their improvements so it’s really important that the high cost items of land and structure have a longer practical use.”
Already this disruption had seen businesses co-locate, operate hot desking, and give serious consideration of who and how their neighbouring businesses could work alongside and together.
The use of artificial intelligence would also have an effect on businesses here in the longer-term future, he said.
“I think what we are going to see is more businesses getting involved in artificial intelligence an robotics. From a real estate perspective that could mean that buildings will have to have quite a bit of infrastructure in terms of their connectivity.
“So, for example, a warehouse may need higher stud capacity and capability for robotics selection for logistics.”
The rate of change could be expected to increase significantly over the next two years.
“I think we always under-estimate the rate of change in the long-term and over-estimate it in the short term but I think we have got to the point where there is far more technology coming into play, and we are far more receptive of it, that it will make a significant impact in the next five years.”