The real estate industry is fighting for survival stronger than ever. Here are four main challenges that property owners should be aware of.
February 15, 2019
Technological and social developments have a big impact on the lives of the people, a fact which makes it hard for the real estate field to face such changes and respond effectively to new trends and ideas.
Innovators and creators might consider the developments mentioned above as an opportunity for them to grow and introduce their ideas with confidence, however, they might still face several challenges.
Canada is experiencing a growth in its start-up community, and the emerging influence of millennials in workplaces. As a matter of fact, business moguls and entrepreneurs prefer nowadays to work in shared workforces rather than traditional offices.
Co-working spaces offer more flexibility in terms of communication, innovation, as well as collaboration and lower operational costs. Small companies and businesses can profit from a wide range of unique offices available in Canada without long term obligations.
Therefore, property owners must adapt to this changing work environment and offer more flexible facilities for rent and for a lower price.
Online Retail Sales
A study conducted by eMarketer showed that Canadians are preferring e-commerce over traditional shopping. Some see this as a threat to traditional stores, thus, a threat to the retail real estate sector. However, many others argue that incorporating both kinds of shopping together might be a suitable solution for many. To illustrate, a big number of retailers are redesigning their stores into showrooms while integrating all of the other traditional aspects online.
Therefore, property owners must be prepared for new developments in the retail industry and its demands. A good solution would be offering spaces in destinations that attract shoppers the most.
Industrial Real Estate
The demand for industrial spaces is increasing significantly in Canada. Despite the fact that it is now possible to rent an industrial space for rent Toronto for a reasonable price, however, it is among one of the cities that has the lowest availability rates of such facilities.
The emergence of technology makes e-commerce the key to successfully promoting and increasing the need for suitable distribution centers near major urban areas. And with the increasing demand for fast shipping, retailers face the challenge of product availability and fulfillment, a fact which tightens the industrial real estate markets.
Despite the emergence of the above-mentioned challenges, advanced technology offers commercial property owners the chance to grow their business efficiently. To illustrate, different software (ex. Lease management software) can contribute to improving operations and lower costs.
Another important digital tool includes data analysis. This last help in making wise and timely decisions, and predict future market changes and behaviors.
Therefore, to be at the top of the game, property owners must enter the technological world and use its aspects efficiently to build a successful business strategy and understand the market better.
Reinventing and meeting market needs is essential in the real estate industry. As already mentioned, today’s developed technological aspects (i.e. blockchain transactions, predictive analytics, etc.) can help leaders in adopting new ideas and aspects for a successful business.
Second, successful strategies require innovation and creativity. As a matter of fact, finding good deals is no doubt a hard challenge that pushes property owners to rebalance their portfolios through following predictive analytics and its insights, aim for strategic partnerships, adopt different property types, etc.
Finally, rethinking the affordability of your proposed house is crucial. The industrial world imposes many challenges on big families or even single adults including the search for cheaper areas to live in.
Canadian lifestyle and businesses are changing significantly, and impact the real estate industry in a major way. Property owners need to build a plan for the coming years in order to meet new markets requirements efficiently and effectively.
As for what to invest in 2019, it is advised to look for millennials needs (i.e. low costs, technology, sustainability, etc.), and of course never be afraid to invest in new ideas, qualified people, and perhaps companies that might be the solution for bigger problems. After all, the best way to predict the future is to try and create it wisely.
Edward Roesch is CEO at Edchained.