Size Doesn't Matter....in real estate.

Eric Manuel
Jun 29, 2017
2 min read

The Short

Technology is democratizing, allowing the “fast fish to eat the big fish”
Real Estate is the ground zero for disruption
The Philippine Real Estate sector is currently undergoing dramatic change
Think exponentially, not linearly
Increase your networks and knowledge by joining Urban Land Institute

The Long

We all know it’s coming. At times, we don’t want to admit it. If it comes, it may be good or bad for us. But, it’s already here. I’m talking about D-I-S-R-U-P-T-I-O-N in real estate. In the good old days, real estate was straightforward – acquire, design, build, lease/sell, and operate. We looked at, land and construction costs, rental rates, sales comps, etc. Size, in terms of market capitalization, square meters, or land bank, mattered. Today, less so. Now, the name of the game is speed, agility, and flexibility.

We still look at those figures, but now, we have to pay closer attention to BIG DATA, Robotics Process Automation, ASEAN Integration, Sharing Economy, Workplace of the Future, Urban Mobility, Logistics, Green Financing, Internet of Things, Vertical Farms, Smart Cities, Artifical Intelligence, Affordable Housing, Millennials/Retirees, Sustainability and Wellness – just to name a few!

At the recent Urban Land Institute Asia Pacific Summit in Singapore, I had the amazing opportunity of joining 20+ other real estate colleagues from the Philippines. For the next few days, we explored dozens of ideas impacting the built environment of cities, buildings, and tenant spaces. We joined 600+ other global experts, sharing information, project information, and drinks/food.

The keynote speaker, Vivek Wadwa, a futurist based in Silicon Valley, spoke about “Amazing or Scary: Technology’s Impact on our Lives, Jobs, and Businesses.” Vivek covered the dramatic changes in technology and its impact on real estate – calling the sector, “the ground zero for disruption.” His lesson for the audience was to “think exponentially, not linearly” – since changes in technology and artificial intelligence impact our ability to forecast the direction of real estate.

We are at a critical moment for the future of our cities, as discussed thoroughly by Professor Greg Clark. In his talk, he discussed how we are at the cusp of change, and we are in the midst of 4 types of economies – sharing, circular, experience, and innovation. The key is to understand how these types of economies will be met by real estate developers. For example, we are all familiar with Uber or GrabTaxi. This falls under the Sharing Economy. The impact on traditional brick and mortar real estate is massive. Think of the day where no one will own cars, and we are all using one of the car sharing services. Imagine what happens to all the parking garages that are now redundant. Highly related, the Innovation Economy focuses on the changes in technology impacting logistics, commerce, and workplace. Globally, there are innovation districts that cater to these types of tenants.

These are exciting times for Philippine real estate. The trends discussed in this summit, have already landed on Philippine shores. The lesson for real estate developers and other stakeholders, is simple - YOU EITHER DISRUPT YOURSELF OR YOU WILL BE DISRUPTED. Technology is democratizing. Information is everywhere. Start learning and connecting with people not just in your industry, but also outside it.