Space as a service will now need to become the norm for commercial real estate asset owners, Property Management professionals must consistently look at active asset management from both concept creation to asset repositioning. 

Building long standing customer loyalty

Hotelification, as defined in CBRE’s 2030 Global Outlook Report, is the repositioning of residential, retail and office space. This is where landlords are offering branded and bespoke serviced spaces for an increasingly mobile population who want space that offers a variety of short-term functions, from living and working, to events, communal dining and much more. 

In the world of hospitality - and particularly that of hotels and accommodation - we have our traditional brands such as Hilton, through to digital players such as AirBnB. It is in this space where the viewpoint ``the consumer is key" is particularly adhered to, and because of that dedication, brands in this space can build long standing customer loyalty. Evidence of this can be seen in how they design the physical asset, the product offering, as well as amenity and service standards. These influences are shaped around what consumers want to see and experience, and it is this way of thinking that the real estate sector also needs to adhere. 

Build it and will they come

In the retail world a good example of investment in a brand comes from Westfield (Group). They use live performances of international superstars - such a John Legend - to help launch their new sites in Continental Europe. They are determined that their sites should not merely be retail outlets, but lifestyle destinations and the need for the brand to become synonymous with that lifestyle, in order to attract both key retail occupiers and target customers. 

This method of building a brand to entice and enhance occupier experience is exactly what office landlords will need to do, particularly in an ever more tenant-favored market with increasing levels of supply and vacancy rates. Landlords will need to become more holistic in their leasing strategies, focusing on both the space provided and the services offered. 

The need to stand out from the crowd has never been more apparent. Despite the limits COVID-19 may have put on marketing budgets, it is those companies that have successfully focused on their brand, who have gained a competitive edge, where they are offering relative value to customers without needing aggressive incentives.  

Firms have also realized that it is not a business critical business requirement, at least in the short run, to have an office in order to operate. 

At C-Suite levels, the office is being recognized as an operational productivity tool, with a customer value shifting away from its 'necessity' factor for the first time. So, landlords must now focus on the concept of space as a service, to incentivize occupation, particularly in markets characterized by supply gluts and uncertainty. This trend of space as a service is something which can be applied to almost all real estate sectors. For Property Managers, the focus on the provision of space as a service must now become part of their core proposition, in all aspects from Design Consultancy to Asset Repositioning. 

CBRE’s Property Management team guides clients in repositioning assets, enhancing their value, uplifting the returns, and extending their useful life. If you would like to know more contact Alex +971 52 684 3621 or email Alex.barzycki@cbre.com