Tertiary real estate: from square footage to customers

Paris, France, August 30, 2018

By Méka Brunel, CEO of Gecina

The points I wish to convey in my speech on the future of the office at the EPRA (European Public Real Estate Association) annual conference in Berlin.

The model of the 90s is dead and buried: suburban residential streets made for Desperate Housewives, and with them, the long commutes to escape the bustle of the city. It has been replaced by one of centrality, where experience, mobility, well-being and accessibility have become the new "mantra".

With the arrival of the millennial generation in the workforce, work methods and office environments have had to evolve. The vision which was based on the university campus and the isolated business district, and which acted like self-contained communities with a wide range of amenities and little access to the city, has been deconstructed in favour of a world based on proximity, as well as a service-oriented approach and connectivity. These are some of the promises of co-working – of which WeWork is pushing the boundaries. Some also see it as the superstar city model based on the “three T's of economic success” (tolerance, talent and technology) suggested by Richard Florida, professor and director of the Martin Prosperity Institute (University of Toronto).

By 2025, according to certain studies, millennials will account for 75% of the world's working population, leading to a clear paradigm shift in the tertiary real estate sector. By prompting an inversion of the real estate value chain so that the user is at the centre, millennials are awakening the old spectre that haunts office real estate: the spectre of the customer. We have thus gone from "real estate-as-immobilis" to "real estate-as-a-service". While it may not be a revolution, we are dealing with an extremely far-reaching transformation.

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