The data advantage
The difference between a successful venture and a missed opportunity in commercial real estate has always boiled down to making informed decisions.
No matter scale or sector, space planning is a risky business, poor decisions about location, use, operating models, and design, can lead to costly and debilitating effects, for stakeholders, people, and the environment.
Until recently, the wider real estate market relied on a mix of static information and instinct to navigate the complexities of the space planning lifecycle. However, digital technology and data are transforming decision making, allowing us to tap into faster and deeper insights, answer critical questions more effectively and unlock the potential of spaces and built assets with greater confidence.
Harnessing data to power space planning decisions through different lenses, such as concept, feasibility, optimisation, monitoring, and repurposing is a capability which separates successful organisations from the rest.
Strategic lens: visions for spaces
The process of designing and developing spaces begins with conceiving the most viable and valuable use. Gone are the days when conceptual decisions were based solely on intuition or past successes. Today, data and insight are key elements of the tool kit at the conceptual phase.
Developers, investors, and designers can harness the power of extensive data sources including people mobility, demographics, dynamic consumer mindsets, and changing market trends to identify emerging opportunities and untapped niches.
Feasibility lens: suitability of spaces
Consumer and market insight plays a pivotal role in assessing the feasibility of different formats and uses for built assets. For instance, a property intended for retail use may have multiple potential configurations: single tenant, multi-tenant, or mixed-use.
Analysis can provide crucial insights into the demographics of the surrounding area, consumer sentiment, foot traffic patterns, and competitive landscape, helping determine the most suitable format that maximises financial return while meeting broader social and environmental needs.
Optimisation lens: identifying the right business models
The success of a space can be measured in terms of different forms of value, be it financial, social, environmental or a balance of all these. However, where significant capital investment is at stake, much of the success of a commercial real estate asset hinges on its profitability.
Robust analysis, founded on strong financial and operational evidence and assumptions, is key to helping us understand the relative potential of different business models. Key factors such as quantum of commercialised space, brand type, market positioning, and proposition will all influence the potential of different business models in specific locations.
Developing a robust business model is inherently data-driven, and allows us to allocate limited resources effectively, minimise operating costs and enhance revenue streams.
Monitoring lens: tracking performance
Once a space or asset is operational, the journey is far from over. Data remains essential for monitoring its performance over time. By collecting and analysing data across financial, social, and environmental KPIs it is possible to track and monitor ongoing `asset health.'
A broad range of metrics can be measured, including sales performance, customer footfall, occupancy rates, maintenance costs, energy performance, and customer satisfaction measures.
Near real time data allows for swift responses to emerging challenges and the ability to capitalise on promising opportunities promptly. In addition, performance data can be used to benchmark against industry standards and wider portfolios, enabling us to gauge how well our assets are faring compared to others.
Repurposing lens: adapting spaces
As markets evolve and consumer preferences shift, many spaces face challenges or become obsolete in their original use. Instead of leaving assets to languish, data and insight allow us to explore alternative uses that align with current market demands.
For instance, a struggling retail space in a densely populated area might be repurposed into shared office spaces to cater to the growing demand for flexible workspaces. Data analysis provides the necessary insights to make such strategic decisions that breathe new life into struggling assets.
In summary, data-driven decision making is revolutionising space planning decisions and the wider commercial real estate industry, empowering us to make well-informed choices from concept to repurposing. By harnessing the power of data, we can identify opportunities, mitigate risks, and maximise the potential of our assets. As technology continues to advance and data becomes even more accessible, those who embrace data-driven practices will have a significant competitive advantage in this rapidly changing landscape.
As leading experts in space planning, the team at Pragma utilises data and insight at every step of the real estate decision process, harnessing it for the benefit of clients and projects around the globe.
Contact us to find out more.
James Miller