Technology and real estate: “We will need to understand the purpose of location”

Technology and real estate: “We will need to understand the purpose of location”

The words are from Bill Kistler, Executive Vice President and Managing Director EMEA at the International Council of Shopping Centres, one of the guests during the latest Almoço Conferência Vida Imobiliária (Vida Imobiliária’s Conference Lunch), under the motto «New real estate investment scenarios in the digital age» which took place this Monday at the InterContinental, in Lisbon.

«The two worlds (technology and real estate) are merging, and that will create great and good opportunities to add value. But it will also bring many challenges in the short-term», believes Bill Kistler.

Also, because «the technological change within the next 10 years will be dramatic and much faster than during the last 20 years. And we are only now starting to see the change and impact on real estate. It is very difficult to predict how these changes will impact a sector which evolves in long cycles», said Bill Kistler.

For now, the office and hotel segments are examples of the segments which suffered the digital impact the most, but the segment most affected was retail, which lives under the stigma of the global retail apocalypse. But Kistler considers that it is not an apocalypse, but rather «a rebirth, a merge between technology and shops».

Online know the consumer better, physical helps with the decision taking

Kistler recalled during his intervention that the truth is that even companies that were created online now move towards having physical spaces, as is the case of Amazon, which «knows that the future is not just online and so will open hundreds of physical shops in the United States and also in Europe», where the technologies are perfectly incorporated.

A recent study from ICSC shows that companies which operated exclusively online registered an increase in sales (including online sales) after opening physical shops, and that this type of space «is very important when it comes to decision taking in terms of online shopping» and a way to contribute for brand awareness. On the other hand, the closure of shops lowers the sales, since «it suggests that company will close».

For Kistler it is certain that «people will always need to live and exist in the physical world», and that is why buildings, of whatever type, will always be necessary. It will be up to the market to adapt in the best possible way.

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