Future of Real Estate
Which future drivers influence our society when it comes to property? What will the future of commercial property in Europe look like?
What are plausible scenarios for the future?
Scenario 1: Boooom
The German real estate sector is growing and taking advantage of new technologies and innovations. Machines have replaced the majority of employees and are contributing significantly to the increase in German economic growth. The growth of the German economy makes it possible to secure a basic income for the general population, whose work has been taken over by machines. The possible negative effects of the use of AI remain a factor of uncertainty for the future.
Scenario 2: Gotham Country
Property has lost significance, owing to the reduced attractiveness of the market and low sales potential. New business models are emerging, based on more efficient building management technologies. Building services are increasingly autonomous as a result of the growing number of technology components in them, while property is becoming less an asset and more of a consumer / mass product. In addition to location, the infrastructure and technology of a property are increasingly important.
Scenario 3: Tech-no! crisis
The economic stimuli of new technologies have no influence on the property market. Major segments of bricks-and-mortar retail have collapsed. Owing to the lack of profitability, no investment is being made in existing property or in new building projects. Property vacancy is high. Buildings remain important for social exchange (e.g., meeting rooms etc.), as no virtual reality concept can replace direct social contact. The economic collapse of real estate is leading to the emergence of new start-ups to occupy the empty and cheap office and retail premises.
Scenario 4: The lazy bone
Thanks to the sustained attractiveness of the real estate sector, the established players had no need to press ahead with innovation and technological developments. As result, the real estate industry has missed important trends, and market attractiveness and the market share of the usual services have declined in the long term in comparison to alternative asset classes. New PropTech players have entered the market, making higher yields possible and gaining market shares. The competitiveness of established players is being challenged.