OSLO (23 September 2015) —The real estate industry must adapt to the complex needs of innovative firms, according to Technology, Real Estate and the Innovation Economy, a new report published by the Urban Land Institute (ULI) in collaboration with Oslo Metropolitan Area (OMA). The report explores how the innovation economy creates a new normal for the real estate industry by disrupting patterns of supply and demand for workplaces, buildings, urban districts and cities, It recommends that the real estate sector adopt a ‘service provider’ mind set, allow for flexibility in its business models, and actively help grow tenants through collaborating with and supporting occupiers.
Co-authored by Greg Clark, ULI Europe Senior Fellow and Tim Moonen, Director of Intelligence at The Business of Cities Ltd, the report discusses the recent emergence of innovation districts and clusters in cities. This shift to urban areas has given innovators proximity to financial markets and investors, access to talent, and high concentrations of customers. It has also brought about a new set of real estate requirements, including customisable workspaces, flexible contract terms, and office design that encourages creative collaboration. These new requirements are no longer solely the demands of innovators; the influence of innovation is stretching to traditional sectors and tenants, rapidly transforming the real estate landscape.
“Real estate is not a passive infrastructure in the innovation economy,” said ULI Europe CEO Lisette van Doorn. “It needs to be proactive in shaping the enterprise environment, the zones of collaboration and discovery, the modes of investment, and the accidental collisions that foster new ideas and applications. The property industry plays a key role in making the space fertile for invention and in meeting the changing needs of new enterprises as they grow and change rapidly from their origins to becoming major players.”
According to the report, the real estate industry must adapt to these new standards of the innovation economy in four key ways:
- Adopt a ‘service provider’ mind set. Real estate must become a service industry rather than an asset industry. Real estate operators must offer services such as funding, coaching, networking and supplies, or they will risk losing out to their competitors.
- Be prepared for continuous adaptation, feedback and complexity. Real estate providers must develop new business models that allows for tailor-made solutions when it comes to access, location, workplace, building layout and rental terms.
- Align interests and build transparency between owners and occupiers. Landlords should become collaborating partners with tenants. To achieve this, real estate providers could work with tenants to build a compelling story around a development or even become a venture capital partner with a direct stake in the success of occupiers’ businesses.
- Provide hands-on stewardship to address the broader framework of innovation. The real estate industry should manage the balance between big companies and start-ups and explore opportunities to provide accommodation or social infrastructure. The industry must also engage with the innovation eco-system to address gaps such as skills, capital, affordability or density.
The report is informed by 12 case studies on buildings and districts in Europe and North America and by the lessons shared at a workshop hosted by the Oslo Metropolitan Area in May 2015. The case studies include The Edge, Amsterdam; VU Campus, Amsterdam; 22@Barcelona; TheSquare3, Berlin; SoundCloud, Berlin; Tech City, London; Media Park, The Netherlands; New York Applied Sciences Campus; Oslo Cancer Cluster Innovation Park; Mesh Norway, Oslo; SUP46, Stockholm; and MaRS, Toronto.
To download a full copy of the report, please click here.
About the Urban Land Institute
The Urban Land Institute (uli.org) is a global non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has more than 35,000 members representing all aspects of land use and development disciplines.