Bets, barriers and bulbs

Outlook 2020  The Christmas lights are up (since October actually) and Advent calendars have now been opened. With two full weeks to Christmas, the accountants are already totting up the P&Ls and minds are turning to 2020. And yet there is a massive elephant in the room that remains to be resolved before we can do that. The RMT has elected to suspend its 27-day strike action on 12 December to allow South Western Railway passengers the ability to travel to vote in the General Election (my fellow passengers will be overjoyed). The question for many is which way will they vote, or will they even bother? A poll last month showed that more than 50% of voters now classify themselves as floating voters. Whilst this might compound the uncertainty, polls of this nature are being shown to be increasingly fallible. Stochastic modelling of political results used to be dominated by polling data but now investment managers are turning to more complex, AI based models that look at social media feeds and betting odds, among other factors. The latter put the Conservatives as dead certs to win most seats and clear favourites to obtain an overall majority. Be wary before placing your bet. There is a danger that this singular focus obfuscates bigger longer-term trends that present themselves to real estate investors and occupiers during 2020 and beyond. The themes of the society, technology, sustainability and the workplace are enduring ones, with all of these cleaving a clearer path through the world of real estate in recent years. My EMEA Research colleagues have collated thinking on a range of thematic issues that set a prospectus for the coming years. It’s essential reading over a jug of egg nog. Find all the articles here. #politics #predictions #outlook

Common interest   One of the challenges to investing in Proptech is the immature digital status of our industry. With a proliferation of products in most segments aimed at doing the same thing, the industry awaits the shakeout that will give comfort on which few will endure and on the many that will fail. A further barrier to investment comes in the lack of common standards that are needed to create confidence in a whole category of products. Common standards tend to arise from either a category killer achieving market dominance, or from competitive cooperation between industry players. A commonly cited example of the latter is the USB interface. Lacking any common industry standard for connecting devices to PCs, accessory manufacturers had to pick a horse from the stable of PC manufacturers that they believed would give them the largest addressable market. This artificially constrained the market size for accessories, making the customer experience worse, which in turn was not helpful for PC manufacturers. In response, 7 of them led by Intel got together, agreed a common standard and the USB was born. The same principles now hold true for our industry around data and platforms. The currently incoherent muddle and push for proprietary standards serves no one. In the absence of friendly ‘coopertition’, the industry will end up with fewer useful products and a few monopolistic aggregators. As we look forward to the new year, isn’t it time that the industry got serious on this subject? #proptech #industry

Culdesac   If you live in central London, then you may well treat having a car as an unjustifiable luxury. For most other places across the UK (even more so in the US), car ownership varies from being fairly important to indispensable. However, times are changing. Particularly for sustainably minded young urbanites living in high density environments and supported by mobility as a service options, car ownership may soon become a thing of the past. Developers are starting to pre-empt this. This week developer Culdesac went on site on ‘the first car-free neighborhood built from scratch in the US’. Prioritising green space over parking lots and roads, the scheme bends zoning rules as part of a publicly supported pilot. The scale is what makes this special: 1,000 units over 16 acres, in which over half of the site footprint will be allocated to landscaping and green space. Residents are not permitted to park anywhere on site; however, there is an element of visitor parking associated with the retail space. Gearing towards a younger audience, the scheme also features guest suites for visitors, communal fire pits, free neighbourhood bus services and plenty of bike lanes and dedicated Uber and Lyft pick up stations. In car friendly Arizona, this is a bold move. Developers in the UK should watch with interest. #residential #cars #parking

Securing sales   One of the challenges of shopping in shops is that they can only carry limited inventory and for that reason rarely offer full product range or depth of stock. We know that for many younger buyers, shops are increasingly becoming places to browse products rather than buy them. One might assume that this is with the intention of buying the same product elsewhere at a cheaper price (75% of Millennials reported doing so). However, Zebra’s recent Global Shopper survey reveals that the primary reason for leaving and then buying online (39%) is that the item that they came to purchase was out of stock. Not such a problem for brands with online distribution but a problem for retailers who might find that the sale goes elsewhere. Better inventory management is one solution to this; whereas facilitating in-store online purchases is another. Technology can help both. In a retail environment where the role of the store is become more nuanced, securing the sale (by whatever channel) is still of paramount importance. Self checkout is becoming the preferred way to deal with this (58% agreeing). A significant majority of retailers (81%) are seeing positive ROI on investments in this area, and they also agree (87%) that this frees up sales associates to add value to the customer experience. Arming salespeople with the latest mobile tech was also thought to help convert sales (73%), especially if that provides the opportunity to complete the sale using these anywhere in the store, rather than just at a till. #retail #technology #experience

‘Tis the season   As the festive season bears down upon us, rather than being a time of peace and goodwill to all men, it’s a time for arguments and unhealthy competition with one’s neighbours over the state of their Christmas lights. I’m more one for a subtle splash of white and gold sparkles here and there; whereas Mrs P favours multi-coloured 10ft reindeer on the roof. However, it seems that even she is outdone by some of the displays up and down the country. Until this year, when it has apparently been stopped over safety concerns, one of the largest displays in the UK was in the Cambridgeshire town of Turves, where the owner had installed over a million lights over 3 acres. Looking further afield, the tallest lighting decoration is an illuminated tree created by Toshiba in Japan at ~40m tall. Meanwhile Malmedy, Belgium holds the record for the most lights on a single tree (19,672) and a property in New York State took the record for the most lights installed on a single house (601,736). Mostly, being temporary installations, these don’t require planning permission; however, a band of neighbours in Ayrshire did once succeed in injuncting their neighbour from installing more than 8,000 bulbs. Thankfully, for my neighbours, they will not be subjugated to this from the Pickerings this year – we will be escaping Down Under to take in some sun and crack open a few cold ones. Before I do, however, watch out for next week’s annual Futures /Cut Christmas Quiz™ for your chance to win big(ish)! #weirdandwonderful #christmas