The global real estate market has undergone a massive wave of disruption led by three main factors — technology, behaviour, and expectations. More interesting is the coming together of all three to change traditional ways of living, working and shopping.
While Dubai lags behind some of its global peers in the pace of change, there has undoubtedly been some spillover effect, impacting the way we live, work, and play.
The residential sector has been disrupted by those who have been able to think more creatively and come up with value-add solutions that fit how people behave, and their expectations from the places they occupy. Probably the most interesting of these ideas is the concept of co-living.
For young professionals living in expensive cities, co-living has emerged as the affordable and flexible solution. These spaces give them access to short-term leases with shared common spaces and amenities. But moreover, co-living offers convenience, flexibility, and great networking opportunities, all of which are values and experiences sought by millennials.
A co-living movement is in the works
Dubai is currently on the brink of embracing this concept with projects like Collective, Collective 2.0, Socio and UNA, all under construction. Units within these developments are competitively priced for mid-income professionals and entrepreneurs, where the emphasis is not on size but rather on community living.
The office market has been challenged by the rise of millennials and the entry of Gen Z into the market for the first time this year. The expectation from an office space has shifted from enclosed rooms and separated cubicles where people come to do their 8-5 job, into something a lot more “social” which the industry terms “collaborative work spaces” or “flexible office spaces”.
No longer do individuals have assigned desks, but instead have the flexibility of working from home. No longer do managers sit in enclosed spaces, but instead share the floor with junior staff. Many corporates are realising this trend and emphasising the need to make more room for “breakout/chill out rooms”, in addition to “quiet rooms” that inspire or stimulate innovation.
It was inevitable that technology would come into play. More smart devices are being handed out so people can work from the comfort of their home or on a flight. To facilitate this, the back-end of technology has had to evolve as well. Cloud computing and shared networks allow for greater and seamless integration of workflows for example.
While Dubai has been slow to adopt these trends, with less than 1 per cent of the total office stock dedicated to co-working, the emirate is set to experience a boom over the next five years. This is supported by the relaxation in the regulatory framework and licensing regime associated with co-working. Just like co-living, the concept of sharing work spaces instills a sense of community and above all convenience.
Not just all work and stay
Changing demographics and appetites, and technology are reshaping the retail industry. Brick-and-mortar retail malls are currently evolving into spaces where people not only come to shop but expect to be entertained and stimulated.
Large-scale, product-flooded spaces no longer appeal to the younger generation. Boutique and experiential stores are gaining traction instead, as they have an edge over mass-market. Home-grown concepts are very popular, whether clothes or F&B, as they provide more of a cultural experience.
Then there’s technology. Click and collect, Artificial Intelligence and Augmented Reality are all examples of technologies retailers are adopting to entice people to their stores and create an experience out of shopping, to ensure they survive the competition. The developer and retail operator Majid Al Futtaim recently partnered with rapper Wil.I.Am’s technology company to use his Omega conversational AI platform across their retail outlets. Omega uses a voice-based operating system that resembles Alexa to engage customers along various touchpoints.
The Omega platform will capture and provide real-time analytics, which will allow MAF to better detect patterns in their customers’ shopping behaviours from the products they buy, to how they buy them (in-store versus online, for example).
The next generation will continue to behave in ways that will force decision makers to think outside the box. Their expectations of the places they occupy and their function will continue to change at an even more rapid pace. These developments are supported by the constant evolution of technology.
With Dubai being a global contender and choice of living for young professionals, we can expect to see the impact of these changes materialise in the real estate sector in the medium-to-long term.
— Dana Salbak is with JLL MENA.