These are some of the potential disruptors to the commercial property market

28 July 2017

The commercial property market has undergone some great changes in the past, says Leon Breytenbach, national manager of the Rawson Property Group's commercial division, and there could be major changes in the pipeline due to constant technological advancements.

Breytenbach discusses potential disruptors in the real estate market in order to better understand their workings and how they may be capitalised upon.

Change in distribution and logistics

As online shopping drastically increases in popularity, customers expect faster execution of their orders, even same day delivery in many instances. Some retail properties may look to evolve to dual functioning entities which receive consumers in person as well as managing online orders and deliveries. This may, in some cases, require a smaller visible retail presence but increase the need for more localised warehousing in order to speed up the delivery process. "Owners of suitable industrial spaces may potentially benefit as they redesign their properties to facilitate this new market" Breytenbach suggests.

Co-working or shared workspace

A new niche asset class has arisen, based on open-concept, collaborative, member-focused working environments. Co-working spaces or pop-up office locations which may be rented for a day or longer are becoming increasingly popular as technology permits businesses to run off-site for most of the time, requiring short periods in a formal office environment. Small or micro companies as well as startups require configurable spaces and flexible leases in order to manage the fluctuation in their business growth. These shared spaces provide all the necessities of a regular office: reception services, telephone connectivity, Wi-Fi, open plan offices, suites, meeting or board rooms, kitchens with free tea and coffee, access to copying, printing, binding, a cleaning service, security and safe parking. "Exponential increases in communication technology and broadband access have also allowed corporates to take advantage of the benefits of a remote workforce, thus requiring smaller or less permanent office space," explains Breytenbach.


"Crowdfunding is a concept where people with a small amount to invest can pool their resources with other similar individuals, in order to collectively acquire commercial property," Breytenbach explains. In the past, only those investors with available finance or sufficient surety for a bank loan could afford to purchase large commercial real estate, but crowdfunding has allowed smaller investors to get a foot in the door too. This factor alone could change the dynamics of commercial real estate business in the future. There are already numerous platforms and internet sites devoted to introducing suitable parties to crowdsourcing opportunities.

Change to the traditional agent model

Advancements in technology have provided universal access and transparency of data of all kinds; no less in the commercial real estate field. "Technology has brought together tenants and property owners through cloud computing, smartphones and social media," Breytenbach explains, "providing a supremely convenient way to obtain property information." Consumers are realising that using digital technology to obtain information permits them to make more informed decisions. Similarly, agents and brokers require up-to-date digital solutions in order to better assist their clients, thus continuing to fulfil their role in the market, albeit somewhat differently. It may even be prudent for both agents and brokers to diversify their areas of expertise. They could expand their services by investing in data and technology so as to include consulting and collaborating with startups.

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