Few companies could have adequately prepared for the impact of the coronavirus pandemic. Fewer still could have done that on their own. The crisis that had stopped the world in its tracks had highlighted the fact that no business is an island. Industries and economies are built on collaboration and a shared vision of growth.

It is precisely this fact that underlines the significance of professional services and consultancy firms to any industry. No single executive, no matter how brilliant, can be expected to have the necessary expertise, experience, and knowledge to successfully navigate every challenge that may come their way.

Real estate is a prime example. Professional services firm McKinsey & Company found that the pandemic has led companies around the world to reassess their real estate — how much of it to have, how to use it, and how much to spend on it.

“Fortune 50 companies alone occupy 2.6 billion square feet of real estate, and some of it sat mostly empty for long stretches during the pandemic. At times in the prolonged work-from-home experiment, the media, employees, and even company leaders wondered whether large numbers of offices were necessary at all,” McKinsey wrote on its website.

“The right approach to real estate can help companies not only to grapple with the universal challenges arising in the pandemic’s wake but also to achieve their corporate goals. Marrying strategy to real estate requires a deep analysis of a company’s needs, as well as data to inform decisions. These decisions are best managed by top strategic thinkers guided by the CEO — a departure from the way companies have traditionally made real-estate choices.”

Consultants are not there to make those decisions themselves — that role falls solely on the chief executive. But what they do provide is the advice or research and analysis to help the CEO make well-informed decisions specifically targeted towards a company’s goals. Real estate consultants, in this example, can supply necessary information like the costs and benefits of each option available to the company, such as selling or leasing a property, or making investments in a particular area.

Adapting to the future of real estate

And while many companies had hoped property management to become easier after the pandemic, the reality is that many other challenges loom on the horizon.

In fact, the pandemic has only accelerated certain trends in the real estate industry, and it has shone a light on many of its underlying issues. According to Christian Ulbrich, chief executive of global real estate services firm Jones Lang LaSalle (JLL), “the convergence of multiple crises — public health, social, economic, and planetary — has served to drive home the urgency of our efforts to identify a few simple imperatives and create a set of signposts that could help the industry ‘build back better.’”

Mr. Ulbrich is also co-chair of the World Economic Forum’s (WEF) real estate industry community and one of the key contributors to ‘A Framework for the Future of Real Estate,’ produced by the WEF.

The framework shared a vision for the future of real estate: a future in which buildings provide us with comfort, are equipped for the most unprecedented of events, support our health and the planet, and are affordable and accessible for all.

As part of this vision, Mr. Ulbrich wrote that the future of real estate should be “liveable, creating suitable habitats for a rich, culturally vibrant existence.” He pointed out that in major cities around the world, people typically spend about 90% of the day indoors, making buildings instrumental in ensuring liveability through a combination of factors like a human-centric and inclusive design.

“Real estate should be sustainable, optimized for zero carbon output in every aspect from construction to operations. The environmental impact of real estate assets is highlighted by the fact that buildings account for 40% of global greenhouse gas emissions, 50% of the world’s energy consumption and 40% of raw materials. If we are to meet net zero carbon goals, we need to accelerate action; action that will require large-scale energy retrofits of older existing buildings and, crucially, the renovation or repurposing of buildings rather than demolition,” Mr. Ulbrich continued.

Part of this change should also lead to the improved resilience of real estate, so that it is capable of adapting to whatever exigencies might arise by mitigating the effects of unforeseen natural and man-made events, such as climate, financial and health crises, and preserve the cultural identity of communities.

Mr. Ulbrich said that properties need to withstand a variety of unpredictable shocks and to be flexible to adapt to changing patterns of working and living throughout their full life cycle.

“And real estate should be affordable, with housing, transportation and essential services available to all. The provision of fair access to quality space to live and do business is essential to the overall health of society. Affordability must comprise both financial access (affordable rents, low barriers to home ownership) and access to the appropriate standard of assets in terms of space, health, location and access to basic services,” Mr. Ulbrich concluded.

Real estate, alongside many other industries, is in a state of upheaval. Contemporary issues, particularly environmental, socioeconomic, and those concerned with health and safety, demand the transformation of this industry.

It is only a matter of time before governments all over the world enact policies and legislation that adhere to these demands. To ensure a long-term sustainable strategy for a company, one must be equipped with the know-how and expertise needed to deal with such changes in policy — expertise that consultancy firms can provide. — Bjorn Biel M. Beltran

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