As the battle for the best talent intensifies and the boundaries between work and leisure blur, employees increasingly choose to work for companies that offer them the best working lifestyle. In a recent report on what millennials want from the workplace, CBRE found that 70% of those surveyed would make various trade-offs to secure a better working experience. 7% would even take a modest pay cut in exchange for a better office environment.
This trend, of course, extends beyond our life from 9-5. Research by Expedia and the Center for Generational Kinetics shows that 74% of Americans now prioritise experiences over products. As millennials, who now account for one in four adults in the UK, increasingly look for unique experiences, the property industry needs to be mindful of and adapt to the ways people use its products – be that offices, residential, leisure or otherwise.
The design of our offices has already transformed massively over the last decade. Co-working was a key milestone, while The Spheres – Amazon’s glass domes in Seattle that enable employees to work amongst plants and in an abundance of natural light – are perhaps the latest example of a unique, experiential working environment.
We are entering a world where individuals are looking to have the coolest job, the most fun at work, and the best space in which to spend their ever-lengthening workday. Employers need to up their game to stay competitive; not only are they expected to create an exceptional physical environment, but also to curate it, incorporating premium services and unique features. At Cain International, our investment in Maslow’s Mortimer House, which, with its events, restaurant, bar, gym and terraces, combines the feel of a hospitality-led private members’ club with dedicated workspace, reflects our belief in the growing importance of blending lifestyle with work.
Leading operators have woken up to the ever-increasing pressures on leisure time, creating consumer experiences that are differentiated, memorable, with a sense of belonging and community. The success of disruptors such as Airbnb is a case in point. The ability to meet and live like a local, staying in a one-off property, often appeals much more than holidaying in an identikit hotel room.
Changing priorities are affecting the way we live, as well as work and play. The growth of the purpose-built student accommodation and build-to-rent sectors highlight how younger people are happy to spend more on a better living experience, with a stronger sense of identity and community, rather than seeing rent as wasted money delaying their ability to own a home.
Retail, too, has finally begun to revolutionise. As online vendors have made products cheaper, quicker to buy and faster to deliver, shopping has had to transition from transactional to experiential. A growing emphasis on interactivity, a convergence with leisure, brand engagement, and the ability to continuously innovate to offer new and different experiences at each customer visit are vital for retail businesses to survive a tough environment. Our decision to invest in the Institute of Competitive Socialising, the company behind crazy golf-themed brand Swingers, was, in part, a recognition of its ability to reanimate former retail spaces: its West End location launched in 2018 in the former BHS store on Oxford Street.
Meanwhile, over in the US, the popularity of The St James, a sports, wellness and active entertainment business we backed in 2016, highlights the growing importance of leisure property – an often-overlooked area of real estate.
Millennials’ affinity with Instagram – where the focus is on the things we do, rather than the things we own – highlights modern consumers’ changing priorities. The growing importance of experience presents new opportunities for those in the property industry forward thinking enough to adapt their offering.
Adam Taylor is vice president at Cain International, specialising in the company’s private equity investments.