How industrial property owners can remain relevant amid the rise of space-as-a-service
Brand and customer experience are transforming the way space providers interact with users – as well as how space is leased in a competitive market
Globally, the real estate sector has been evolving even before the pandemic – which has accelerated many changes in how industrial properties are developed and leased.
The rise of space-as-a-service - a structural shift in how commercial real estate provide services and products [space included] to occupiers is changing the landlord’s role from rent collection to service provider.
Space-as-a-service is centred around providing flexible space solutions that meet the needs of modern businesses. This can include everything from the physical space’s design to the amenities offered such as meeting rooms, uninterrupted internet connectivity, a café or coffee shop for example.
For property owners, and particularly industrial property which is also experiencing a shift to more modern logistics assets tailored to suit users – how space is designed and constructed determines the success of leasing such space.
As occupiers begin to view real estate as a product, it is becoming increasingly important for real estate companies to focus on building the visibility of their brand and the value it creates to occupiers.
Brand consistency, occupier experience
Brand and customer experience are transforming interactions between providers and users of most products and services. Now they are influencing how industrial properties are constructed, designed and leased.
By establishing a strong brand identity and building trust with their customers, companies can succeed in providing the premium experience that modern occupiers seek from a physical space.
That means less focus on rent collection [though key to the financial wellbeing of the business], and more on delivering experiences and value that can enhance or transform the working environment.
Occupiers want to know who they are renting from? Brands that create a strong identity and build trust with occupiers will thrive in the current economic environment.
Brand consistency is also key as occupiers want to know that they can rely on their space provider. This consistency can extend to services offered within the brand portfolio – can an occupier move from one building to another in a different location and get the same service and experience? These all make a huge difference in attracting and retaining occupiers – as well as enabling occupiers to grow within the portfolio.
A property brand should communicate itself across the entire customer experience, from the look and feel of the property they rent to the reception space, right down to the expectation of properly functioning air conditioning and speedy Wi-Fi. The experience should be consistent across buildings.
Many real estate companies outsource property management – the customer touch point. This means they lose the ability to build a customer-focused front-end brand experience.
Traditional real estate companies are beginning to rethink their value propositions. Some offer all-in pricing for space rather than rent with a service charge on top. Ultimately, leases may become more standardised, shorter, easier and portable – enabling occupiers to move between locations and enjoy other services or facilities within the same brand in keeping with their changing workspace needs.
According to data from Research Dive, the global space-as-a-service market will grow 4.2% to record more than $11.5m in revenue during 2021–2028 from $8.438m in 2020.
Increased co-working space and technology are changing the way companies function and how they utilise space. High speed internet connectivity, smartphones usage, the proliferation of proliferation of cloud computing and Internet of Things as well as acceptance of artificial intelligence are redefining how space is utilised.
These factors are set to drive growth in the sector – and the industrial real estate sector is not immune to these structural changes.
Inospace, South Africa’s leading owner and operator of branded serviced logistics parks is founded on the basis of putting the brand value and occupier service at the heart of its offering.
As an organisation that services small and medium enterprises (SMEs), Inospace identified and launched Inocircle – an online platform aimed at resolving business pain points and adding material value to these businesses.
The free subscription service helps occupiers manage their supply and procurement demands and access industrial and logistics-related goods and services offered by various vendors at preferential rates.
Inocircle provides new and existing occupiers with discounted short-term insurance and business assistance products. Additional services suitable for SMEs include an IT help desk, tender notifications, marketing services and legal and labour advice.
This is over and above some of the amenities (services) that occupiers within more than 50 logistics parks in Cape Town and Johannesburg have access to. These parks have boardrooms, pause areas, cafés and a dedicated park manager looking after their interests.
An occupier within the Inospace portfolio has full access to boardroom and meeting facilities in another location. This speaks to brand consistency and what the company values from the service provider and occupier relationship.
Top-performing organisations are insight-led, they focus their core and innovative propositions through building a multi-dimensional view of the occupier.
Occupiers are informed, tech-savvy and vocal – and this provides real estate companies to deliver unrivalled experience through space-as-a-service.
Savvy real estate owners will create brand consistency in every building and park, and using every occupier contact as a constantly good experience.
To attract and retain occupiers, real estate owners will discover that a good brand is more valuable than a good piece of real estate. It can generate more revenue and can be the difference between success and failure in the world of space-as-a-service real estate.