Remote Work Reshapes Cities, It’s Time For Opportunities (English Version)

Before COVID-19, we used to say that Generation Z was going to work remotely so that they were going to be digital nomads. That means they could work connected from anywhere: houses, libraries, coffee shops, or anywhere around the world. COVID-19 has forced the start of this transformation to previous generations. Remote work, even if this situation has forced it, has suddenly entered our lives. I suppose that during this time many companies have thought about whether an employee is equally productive remotely, why not save the costs associated with this employee warming a chair at the office (in addition to the obvious security reasons due to the pandemic). And voilà, we are facing a new scenario that affects the technology and the real estate worlds.

And yes! This situation affects the real estate world because if we work from home, our houses must adapt physically and technologically. Because if we no longer work at the office, the offices will no longer have the same use and must adapt or look for other purposes. Because if we no longer go to work, we will reduce commutes, and this, will affect transportation. Because without so much movement, there will be no need to live close to work. And finally, because if all explained above happens, cities will never be the same.

If there is a higher number of remote workers within the population, these workers will no longer go to the cities to work, so they will be able to live wherever they want. This fact could repopulate other areas, decrease the real estate pressure in the cities, reshaping them, which would reduce the price of real estate assets, and would increase the value of other regions. Something that also, on the other hand, is a contradiction with the millennial’s preference to live in urban areas.

We can classify these new workers into three different groups:

1. Those who work remotely but need a stable environment, establishing an office at home. This group will need larger houses, with outdoor spaces, to create a functional workspace with a good connection and platforms to work from home. This group will prioritize living farther in a cheaper area in exchange for a longer journey once or twice a week.
2. Those who work remotely but prefer to be on the move (digital nomads). They might like working in a cafeteria, a library, or in a caravan around the world. This group will need smart and flexible spaces, open and well-connected data, flexible services, and accessible and efficient environments.
3. On the other side, there will be people who will have to stay close to their jobs and therefore concentrated in the cities and socially integrated. Unlike the other two groups, they will be even more attracted to the city center, with exclusive services and specialized areas. Something like a big coliving.

Nowadays, if we look at the PropTech ecosystem, the startups are based in large cities. Because it is the place where concentrates people and real estate, therefore, also investors and the needs that technology has to solve, in these niches, the PropTech industry is guaranteed.

If remote working becomes a bigger reality taking into account groups 1 and 2 mentioned before, PropTech companies should find profitability in less concentrated areas, in markets where profits could be tighter, and where the digital transformation may be slower (this may not happen if digital nomads populate these areas). Maybe PropTech companies could specialize in urban or rural areas.

This accelerated trend may be a specific niche in PropTech. This trend may stimulate the growth and development of technologies such as 5G, blockchain, digital signature, remote work platforms, virtual reality, team collaboration platforms, CRMs, or IoT (in IoT, there might be so many possibilities, especially if companies share expenses with the employee).

But the great challenge, from my point of view, would be in the increasing interest in areas far from big cities (cheaper and with a higher quality of life) that should adapt to digital transformation while the pressure in the cities decreases. It could increase the interest in modular housing or the nomad lifestyle, which is being connected while traveling and discovering different places. The services that are provided today to people who live in a city will no longer exist as we know them, such as supermarkets, gyms, or libraries. These companies will have to reinvent their way of providing services to a client who is in constant movement, wants to be different, and wants the purchases and deliveries to go farther. And speaking about deliveries, this new trend is something that companies like Mayordomo could perhaps rethink. MIPIM PropTech Europe chose Mayordomo last week as the best proptech startup.

Yes, I know that this change is not going to happen tomorrow. We are going to need some time to adapt. But the COVID-19 pandemic has accelerated this natural process that younger generations would have chosen, hyper-connecting us to be physically farther, without leaving our jobs. It seems that remote work will transform much more than offices and the living rooms of our houses.

PropTech innovators, are there opportunities in this trend? Maybe it’s time to take advantage of them!

Sheila Gracia

Services Director at the Real Estate Agents Association in Catalonia