Nuveen Real Estate: Preparing for tomorrow's world
Based in London, Jack Sibley is the Innovation & Technology Strategist for Nuveen Real Estate, focusing on leveraging innovation and technology to drive investment performance for our clients. Here, Jack gives an introduction to his remit and how he is helping Nuveen Real Estate prepare for tomorrow’s world.
What does your role as innovation & technology strategist entail?
I help us drive technological innovation across our global platform, in line with our tomorrow’s world investment philosophy. My focus includes the analysis of how technology is changing different sectors, finding solutions to help us react to this through proactive engagement with PropTech start-ups and disruptors, and leveraging emerging technologies such as Big Data and Artificial Intelligence. These initiatives are then integrated into Nuveen Real Estate’s investment process, driving decisions around asset selection, optimum asset management and portfolio resilience.
At Nuveen Real Estate, our goal is to deliver long-term out performance by ‘future-proofing’ today’s investments and identifying the optimum strategies for tomorrow’s world. By being leaders in technological innovation, we can align our investments with the future demand for real estate to achieve resilient value creation. I work across Nuveen Real Estate’s investment, research, product and operational teams to ensure that this approach is embedded and leveraged across the global platform.
Is commercial real estate being disrupted by the tech sector?
Real estate has not yet felt the full impact of technological disruption, but the seeds of innovation are firmly planted and starting to germinate. The question is not if, but when and how the industry will feel the impact. That being said, the industry will not suffer from deep disruption overnight – it does have time to process, react, and reposition itself. Historically, real estate has not been the most dynamic or innovative, due to barriers like the risk-averse culture, a lack of alignment between stakeholders, and overall expectations that the future will be rigidly linear. But over the last 12-18 months, the mainstream of the real estate industry has started to wake up to the opportunities and threats that innovation and technology will bring, with active engagement and adoption starting to take off. Those adapting to this structural shift will succeed in tomorrow’s world, and those that can’t or choose not to will struggle.
What are the main challenges that the real estate industry must overcome in reacting to technology, innovation and disruption?
The industry faces two main challenges: the first is navigating the short-term, technology-driven shift in the purpose of real estate. A major task is to understand what people fundamentally want from their built environment, particularly in the two largest sectors: retail and office. The digital world allows people to work and shop remotely if they choose to, and real estate must differentiate itself by providing an experience, or heavily prioritise efficiency. The second is adapting to an accelerated pace of obsolescence. In order to do this, real estate must do more to encourage and reward creativity, forward-thinking and innovation. The industry must also ensure it is strategically focused on structural drivers as much as cyclical concerns, by applying rigorous research to ensure investments remain relevant in tomorrow’s world.
The real estate industry must also adapt by learning how to digitise. This might involve tweaking conventional approaches in the short term, but will lead to scalable efficiencies, insights, and other benefits in the medium term.
If we are going to digitise the industry, we must challenge the way we operate across the entire lifecycle of property investment, from research and transaction to management and development.
What are the key strategies for digitising the real estate industry?
We must challenge the way we operate across the entire lifecycle of property investment, from research and transaction, to management and development. There are many areas of interest, however, from a PropTech perspective, three themes represent the most immediate opportunities: data, smart buildings and digital platforms. As a private asset class, granular data on the market itself has always been opaque, with few incentives to contribute to the collection, aggregation and sharing of this data.
Efforts to democratise access to this ‘hard data’ (rents, yields, vacancies, square footage, etc) are underway and, if they succeed, could unlock a lot of value. Equally important, and perhaps on a faster timeframe, is how to leverage ‘soft data’, such as mobile phone geolocation data, transport flows, social media data, and soon. Low hanging fruit in this arena includes open data initiatives, where cities and public organisations open up access to the data they collect, including demographic, transport and ownership information.
The theme of smart buildings is still maturing, but the falling cost of sensors is leading to more granular and more useful data being generated, which is driving progress in areas like energy efficiency, optimising productivity and understanding space utilisation. This area is expected to grow significantly as 5G is rolled out over the next three to five years. Finally, digital platforms are a diverse category targeting a variety of end-users, asset managers and real estate investors. Some are apps that aim to create ‘Phygital’ experiences of a space, others are workflow tools that create a more dynamic dashboard than the traditional default of email and excel, and the most ambitious are creating digital marketplaces to connect buyers and sellers, ultimately aiming to become blockchain-powered execution platforms.