Seeing beyond the product – The Property Chronicle
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Seeing beyond the product

Investor's Notebook

Real estate is the embodiment of the tangible. Its substance gives us a sense of security and durability, and this applies to both private residential and commercial real estate. Yet the real estate industry is ultimately based on services – more specifically, the temporary provision of space for a fee. Real estate as a product is, therefore, only a means to an end for the creation of value or consumption made possible on the space available. In the past, it used to be sufficient to perceive real estate as a tangible good if the requirements of the users were very similar and remained stable over a relatively long period. But there is much to suggest that this perspective will no longer adequately meet the challenges facing the real estate industry (especially the commercial sector) in the decades ahead. Many commercial real estate users currently find themselves in a market environment that is uncertain, changing rapidly, demanding a fast shift in focus. While cost discipline will continue to be a necessary condition for the business success of real estate users, it will no longer be sufficient if cost savings have to be made at the expense of flexibility. 

Investor's Notebook

About Tobias Just

Prof. Dr. Tobias Just FRICS is an academic director and managing director of the IREBS Real Estate Academy and Professor of Real Estate at the University of Regensburg.

Articles by Tobias Just

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