The first speaker of the Unconference at CUAsia 2017 was Juliette Morgan, who spoke on the ‘sex of real estate.’ She is a partner in the London market for Cushman & Wakefield, where she runs their futures group and a property accelerator.

Juliette began her talk with what she referred to as ‘35,000-foot money’ which is a global investment into real estate that is driving inequality in cities and forcing those who can’t afford to stay out of the cities. Then there is this fourth industrial revolution – in this beautiful convergence of things going on, attitudes are changing as to where work happens, and companies realize that to retain employees, they have to let them work from anywhere. Companies are taking less space and are using coworking spaces as part of their strategy to keep talent. There’s been this incredible uprising of tech and freelancing, which creates a perfect storm in real estate and coworking.

Then she addressed the question, ‘What’s happening in real estate?’. Real estate companies are giving a massive long lease because they want to ensure that the companies can pay for those spaces in the long run. Then they sell it again to what they call gateway cities, such as London, Paris, New York, Shanghai and Los Angeles, oddly enough these places are unaffordable now. The reason behind doing this is because the returns pay for the capital and infrastructure in our cities, such as peoples pensions and road infrastructure. The dystopia is the investment grade property, that needs these contracts for money, for a long time and it needs its leases to be less risky. They always sell it to the highest bidder, they sell it to the company that is safe and can pay for longest; and that thought process makes cities increasing dull or homogeneous or identical.

The whole point about the real estate story is to tell you that the market is stacked against taking the risk, and is stacked against giving space over to coworking. Last year, tech occupiers accounted for 43% of occupiers, and among companies taking up space in London, 8% of that went to WeWork. There is something significant happening in real estate, tech has overtaken the amount of space that financial companies now take, it requires and demands coworking and flexibility. Typically, a venture capitalist invests in a tech company expecting to put 3 or 4 investment rounds inside 7 years. The real estate companies don’t want to deal with even one of those moves, let alone 4 or 5 in 7 years, so there is a structural problem in the way real estate behaves compared to the behavior of technology. Juxtaposed against that is that companies are getting smaller, they have to offer a platform just to get people to work for them and not those tech companies. They may provide an alternate option to employees, such as working from home two days a week. If you take two days a week out of the office for people to even be there, you can reduce your real estate by 40%, and that’s a big deal. Therefore, those leases for big stable companies are starting to look a lot less stable since everyone wants to reduce the real estate overhead. Some companies will be renting more coworking, and they will also create their coworking spaces internally.

Then you’ve got what is happening with freelancers in the economy; people can work anywhere; you can have a remote year to travel around the world just to get an insight for yourself which may lead to some discovery or to building a company. These are the forces driving what’s going on in freelancing.  Juliette stated, “Coworking is critical because its a conference’ it’s where all these things can happen; where companies can start and grow, freelancers have workspaces and corporates have the hunting ground for innovation.” You have the freedom to find and work with like-minded people in the workspace that works for you, and you can make connections.

Moving on to spaces and service –  coworking has changed the real estate industry entirely because they provide some flexibility and are treating their building portfolios much more like hotels or at least they are starting to think that way. “You deserve some credit for shaking what was otherwise a sleepy industry.”, she commented.

Towards the end of the session Juliette pointed out that coworking spaces were all starting to look the same, she said, “You guys have adapted this design culture which deserves some more differentiation.” The shared economy has forced investors and developers to adopt flexible workspace. On this note, her parting message to the audience was, “ Coworking is really where the value is now, its this incredible place of community where freelancers, corporates, startups, and visitors can all join together in one place, and the real estate industry can’t do that. You are the entry points to both place and opportunity, and that’s a wonderful thing, that’s the zen.”