Editor’s Choice: The real estate world as a stage

That is certainly true of the retail real estate industry. Joey Kaempfer, chairman and founder of the outlet centre operator McArthurglen, put it this way during a frank and lively interview in Vienna: 'When people ask me what we do, I often say I'm in construction but we’re really in the entertainment business. People need things to do. If you feed and entertain them and if the places are beautiful, they will come.'

His words echoed those of his Spanish colleague Joan Jove in Milan earlier in the week, when he talked about how he manages McArthurglen’s operations in Southern Europe. Jove explained how the outlet centre operator has embarked on an innovative collaboration with Universal Music to record songs by a stable of McArthurglen artists. One of these artists generated no fewer than 600,000 streams of the song in a single month, he noted.

Experience economy
By branding the artist, the artist helps to brand the operator, Jove said. ‘Consumers connect online and in the centre and you create reasons to come and visit… You need to invest in the overall experience.’

The underlying rationale for the shift to the experience economy is that goods and services are becoming commodities, according to Joseph Pine, co-founder of Strategic Horizons. In his keynote speech on the first day of the ICSC conference, Pine pointed to successful retailers like Starbucks and Nespresso to illustrate the experience economy is set to become an increasingly important driver of the global economy. 'That is where growth in GDP and jobs is going to come from in the coming years,' he predicted.

Authenticity was a key theme at the ICSC conference and during his presentation, Pine talked about the Polonius test and the importance of ‘being true to thine own self’, a reference to the character in William Shakespeare’s play Hamlet. But although Pine provided some thought-provoking insights into the topic, his presentation as a whole seemed rather formulaic.

Keeping the seats warm for the robots
While it could be said that Pine failed his own Polonius test, over in Vienna, Ben Hammersley, editor at large at Wired Magazine, made a far more convincing case for how new technologies are changing the world as we know it.

Advances in artificial intelligence are posing a major threat to traditional professions such as lawyers, doctors and even fund managers, Hammersley told the INREV delegates during a riveting keynote speech. 'Many jobs are being taken over by artificial intelligence. We're just meat puppets keeping the seats warm and waiting for the robots to come.'

Hammersley pointed to examples in the legal and financial sectors, where software programmes can scan legal documents or spreadsheets and spew out a fundamentally sound analysis. New technologies are not creating as many jobs as they are destroying, he added. 'It's a huge social problem… fund managers are screwed.'

The pace of development has simply accelerated in the past decades, Hammersley said. 'The amount of computing power is doubling every year. That has fundamental implications for everything we do.'

Amazing technologies
The role of the real estate industry will also change, he predicted. Increasingly people will want to live in an environment that facilitates electric charging, solar panels and drone deliveries, he added. 'The desire to use these technologies is so great that some people are actively looking to move to housing developments that have them.’

Like a good Shakespearian play, Hammersley’s act ended with a warning for his audience. ‘As we head into the future, it is incredibly important to think about the buildings you are offering to the market and whether they can use those amazing new technologies. If they don’t that will be a huge detriment to you as a business.'

In other words, real estate developers and investors face both a challenge and an opportunity. But Hammersley put it far more poetically: ‘Real estate is both the stage for life and the enabler for it.’

That’s the line I liked best.

Judi Seebus
Editor in Chief