We are excited to announce the release of our new book, ‘Reworking the Workplace’ with RIBA. Publishing on 1 June, the book explores the future of work, workplace and the city in the face of global disruptors. It provides data, concepts and frameworks, historic analysis and 50+ cutting edge case studies, across three thematic areas of People, Purpose and Place.
Lead authors Nicola Gillen and Richard Pickering with; Sophie Schuller, June Koh, Zoe Humphries, Andrew Phipps, Rachel Casanova, Laura Danzig and 30 other contributors from across Cushman & Wakefield.
THE VALUE OF PLACE
For those working in the real estate industry, the importance of location has been drummed into us from an early age. Over most of the course of history, the location of an asset has been the most significant explanatory variable of its value and utility. But why is this and what does it really mean? And in the modern world where value drivers are shifting rapidly, are old maxims useful anymore?
Fairly fundamental economic principles establish that the value of an asset is typically a function of supply and demand. Our world is vast, and only a small percentage of it is used intensively. And so, despite there being a finite supply of land, this is not the driving factor of real estate value. Commercial and residential demand is very focussed on a limited number of highly concentrated global population nodes. This has created a huge gulf in value between the centres of global megacities, where land can trade in the hundreds of millions of dollars per acre, to unfarmable land in remote locations, which is essentially valueless. Typically, the further that land sits away from these demanded locations, the less valuable it is, creating radial patterns outwards. But why is this?
We attribute the utility of and hence demand for location to three conceptual factors: amenity, agglomeration and serendipity:
- Amenity is the presence of a specific feature or locationally-bound service, which creates value for others. This could for instance be a beautiful park, a department store, or a centre of public administration. Often these are found in city centres, where they can service the largest population catchments.
- Agglomeration is a colocation of symbiotic businesses, industries or people that create value for each other. This could for instance be a shopping centre, a tech accelerator or a science park. It is people rather than places that drive agglomeration, and high energy agglomerations can typically be found at the convergence of many different influences in our densely populated cities.
- Serendipity in this context is an unplanned encounter that creates value for the individual that experiences it. This could be an overheard conversation which leads to a business opportunity, or bumping into a stranger, who becomes your romantic partner. It goes without saying that the more people you bump into on a daily basis, the more likely it is that one of these encounters will prove valuable to you.
These three factors underpin most forms of demand for a specific location. Over time they have evolved from base factors of amenity (such as founding your village next to a river), through to complex commercial ecosystems found in modern day cities. In the modern world where we can build upwards and travel outwards at greater convenience, new value factors, such as density, accessibility and use limitations have also come into play, supported by regulatory and planning constraints introduced over the past century. This has created a much more complex and more managed pattern of values, upon which 21st century cities have been based. However, once again, the game is changing, with digital disruption now unsettling old orders and creating novel value drivers.
In particular, in a world where shopping and clerical work can be carried out without leaving your front door, the value placed on being near to something else (for instance a shopping centre, or a central business district) is starting to wane. This in turn releases some of the pressure on these dense demand pinpoints that have developed and intensified over the past 400 years.
What is less easily digitally replicated (at least for now) is serendipity. You can’t bump into someone unexpectedly in your home. It has been a common criticism of post-pandemic remote working; that whilst designed 1:1 interactions have worked quite well using digital media, unplanned interactions and edge of network connections have suffered considerably. This is significant, and informs how the value, purpose and success factors around place might shift over the coming decades. As old factors of functional amenity become less relevant, more emotional and complex factors such as serendipity, belonging, experience and ego rise in importance.
The challenge for the real estate industry is that our places and buildings have not until very recently been designed with these factors at their core. Shopping centres have focussed on accessibility and functional layouts. Offices have historically been designed as places to keep dry and comfortable, whilst carrying out clerical tasks, largely in isolation. Digital disruption has driven a coach and horses through these former value drivers. Why would workers now bother incurring the time and costs of commuting to replicate value drivers that they could achieve at home?
This now frames a challenge to those designing, owning and managing offices to switch up the game. Successful new spaces need to put the ability to collaborate, derive personal identity and expose workers to valuable experiences and connections at the core of their offer, rather than as a retrofitted afterthought. This will require a new look at which locations, use mixes and service agglomerations are best placed to deliver this.
This blog summarises elements of content from ‘Reworking the Workplace’, in anticipation of its general release by RIBA Publishing on 1 June 2023. The book explores the future of work, workplace and the city in the face of global disruptors. It provides data, concepts and frameworks, historic analysis and 50+ cutting edge case studies, across three thematic areas of People, Purpose and Place. Further weekly sneak previews in this format will follow leading up to general release!
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Preorder: To pre-order your copy of Reworking the Workplace click the link here: At the RIBA Bookstore, and On Amazon
To get in touch with the authors, Nicola Gillen, Richard Pickering plus other co-authors as appropriate