Changing spaces - Issue 171 - Magazine | Monocle

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the diverse business district
More bang for your buck
Céline Crestin


The high-rise office towers of the Parisian business district of La Défense are home to more than 500 companies and 180,000 office workers. The pandemic not only changed what the buildings are used for; there has also been a shift in what people want from their workspaces, including more common areas, multi-use spaces and access to good restaurants, shops and recreational activities. We have seen a shift towards co-living.

But the key to making sure that La Défense continues to grow and thrive is by mixing functions. Each building should have a floor that is open to the public. We’ve had much success with designing events, including exhibitions and festivals, that interest office workers, students and residents alike. We have been working together with businesses and residences to understand how this neighbourhood should look and function. It’s about bringing people into the area who might not have visited before. But it’s also about giving opportunities to office workers to experience the district in a different way. We hope that this approach will make La Défense the model for the business district of the future.

Since it was first established in the 1950s, Paris’s La Défense has defined not only the French capital’s skyline (it is home to the first skyscrapers built in the Paris metropolitan area) but also its financial markets. Crestin is the district’s chief strategy and sustainability officer and is responsible for making sure that the iconic neighbourhood hits its environmental goals.

THe role of the developer
Balancing act
Jin Lin


As a developer you have the opportunity to change city skylines. Because of this, the quality of buildings is something that we at Aqualand are very focused on. Once a building has been built, it’s a perpetual part of a city’s image, so the decisions you make during the development process need to be precise and you need to respect the land you’re building on.

I have the strong view that land is a one-time opportunity: if you deliver an ugly building, it will always look that way; if you deliver a beautiful building, it will always be beautiful. Buildings outlive humans and are like sculptures, works of art, that belong to the entire city. As such, developers have a responsibility to deliver projects that aren’t just suitable from an economic perspective but also have a long-term benefit to a city’s urban design.

Doing so requires patience. With Central Barangaroo in Sydney, for instance, one of Aqualand’s landmark projects, it took many years because we worked closely with the government. In the past, I’ve walked away from developments that completely worked at the feasibility level because I wasn’t satisfied with the overall urban design. 

“Developers have a responsibility to deliver projects that aren’t just suitable from an economic perspective, but also have a long-term benefit to a city’s urban design”

In Sydney, we also hope to address the city’s ongoing housing crisis through a new scheme that focuses on low-to-mid-rise projects. We recognised that large-scale developments typically take at least five years to come to fruition and so we are focusing on smaller, shorter projects. By entering this sector and completing boutique developments more quickly, we hope to free up and provide more housing stock.

Low to mid-rise development is exciting because they’re often mixed-use and community-focused. We see our buildings as hardware and the local businesses and projects that fill the developments and activate the precinct as the software. They’re both equally important.

Aqualand Group is an award-winning Australian owned and operated luxury property, hospitality and investment firm. Lin is the managing director and, over the course of a decade in the role, has overseen a slew of major projects overlooking Sydney’s iconic harbour. 

The importance of being prepared
Game plan
Caleb Dunn


What has previously built wealth and property portfolios has been the mindset that if we put a few million pounds,  dollars or euros into a particular transaction, then review tenants’ rent every five years, income will go up and up. As a result, detailed scenario planning was often put in the “too hard” basket and the outlook that, “Hey, we’ve done this before, we know how to succeed,” was prevalent.

But that’s all had to shift due to new and different demands in the market. You have the “hotelification” of the office and expectations for services to come with apartments, so the return for investors is far different. Before, particularly in commercial properties, you could be very hands-off and make a lot of gains. But the expectations from tenants or clients are now extremely different.

“As an owner, would you know what you’re going to do if a tenant does leave? Are you prepared to take on development risk and change the use of the building?”

Owners and investors now need to be even more prepared for a situation to change rapidly. Tools are needed to quickly assess things like rapid increases in interest rates and delayed development time, which affect borrowing costs. Having scenario planning completed is important. For instance, as an owner, would you know what you’re going to do if a tenant does leave? Are you prepared to take on development risk and change the use of the building? Or are you going to put in a concierge and amenities, which is going to increase your chances of getting a higher rent, and increase your return on an investment?

By thinking these things through, rather than just relying on the traditional outlook that property is a super-solid investment – and the mindset that, “We’re always going to have a tenant in this building because commercial real estate is a safe bet” – owners can be proactive, rather than reactive, and not risk losses when circumstances change. This is why being agile and planning for downside – as well as upside – is extremely important. Today, what got you here won’t necessarily get you there. 

After working in property and technology for nearly a decade, Dunn co-founded Pantera, noticing his clients’ need for software that could quickly and accurately create robust cash flows and investment models – his proprietary software does just that. 

The downtown scene
Focal points
François Trausch


Since March 2020 people have been concerned about what to do with their office space. My initial hypothesis, near the start of the pandemic, was that if you drew a concentric circle of 5km around each city centre, the office buildings within that ring would probably do well and those outside it would struggle.

We now know that in Europe and in Asia this is mostly true: tenants congregate towards the inner city, choosing to give up suburban offices. But this hypothesis was wrong in the US. In city centres in the likes of San Francisco, the downtown is struggling. This problem stems from the fact that, in the US, commutes are typically longer, which means the question for office owners is, “Does my building and its neighbourhood earn my commute?” If not, people tend to stay at home.

In Europe, businesses aren’t facing this challenge: people tend to need to be huddled together to solve problems and work. Despite this, the average occupancy of an office is 50 per cent over the course of a week – at peak times it’s 70 per cent but on Fridays as low as 20 per cent. This means that you still have to cater for that peak period.

So offices are still essential. We need to think about what we do with them outside peak times; how we can make them earn the commute. Do we put a playground on the roof or does the space find another use at night? It’s about making sure that the buildings in our cities are appealing and used for different purposes.

Trausch is managing director of Pimco and ceo of Pimco Prime Real Estate. He is regularly on the Mipim jury and is a global trustee of the Urban Land Institute.

The local champion
Community service
Olaide Oboh


It’s a travesty that in some of our major cities we’re creating significant developments and the local community doesn’t benefit positively from them. At Socius we have made people, not just property, our business. We realised that, as a developer, we can have an effect on people’s lives that goes beyond just housing them; we have the ability to address the health inequalities that individuals and communities face and to create education opportunities. As well as being a fixer, we see ourselves as an enabler, bringing people together. This involves everything from working in schools near our developments to putting the building blocks in place to create sustainable growth.

One of the bigger challenges you face as a developer is addressing ingrained, multi-generational issues. For instance, we’re working in Cambridge: to the surprise of many, it’s one of the most unequal cities in the UK, with significant levels of deprivation. To try to turn this around, we have put boots on the ground, meeting the community to understand what the issues are and identifying which people we need to work with to address them. It’s important for us to build such connections before construction. And once the buildings are built, we don’t walk away. We continue to create the right infrastructure so that the buildings and community can continue to thrive over the long term.

All of this is looking to address the element of mistrust associated with developers. It’s not just PR; it’s about credibility.

Oboh is an executive director at Socius, a property developer that focuses on building relationships with partners and developing mixed-use neighbourhoods.

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