Paul Clark led  the investment strategy  of the Crown Estate for nearly 13 years as it transformed from a traditional estate into a focused pro-active asset manager. He has vast experience in the global real estate sector in the UK, as well as an investor in Europe and Asia, in creating long term, sustainable businesses and in building and managing complex teams. He is one of our mentors and his feedback and invaluable connections help us grow fast and sustainably. 

This time, we wanted to learn more about his perspective on the future of office real estate and the key role that technology will play in this industry. Our CEO and Founder, Bogdan Nicoara, spoke with Paul recently  and you can watch their conversation here or read the summary  below.


  • We’re in for a long haul in terms of people coming back to work
  • The future for offices is one of greater flexibility with buildings containing a mix between long term  and short term leases with more bespoke arrangements. Traditional developers will start integrating what coworking spaces have been doing
  • Big companies might in-source many of their activities, have dedicated staff for technological advancement, and even absorb PropTech startups
The pandemic and its impact on the UK real estate market

Paul Clark thinks that in many ways, “everything and nothing changed”. The significant strategic trends which have been influencing change in the real estate sector are all still present  and the events of the last few months has only accelerated their pace. Although the first reaction of the UK  real estate market to the pandemic was to close down with virtually no  transactions or leasing deals taking place during lockdown. 

Obviously, some real estate sectors have been more affected than others. While the restaurant subsector has witnessed a significant level of  business failures, “online shopping penetration in the UK went from about 20% pre-lockdown up to a third. It has subsequently fallen back a little but, but it may well come settle at around  25%”.

On office spaces, Paul’s take is that coming back to work won’t happen rapidly . “I think we’re in for a very long haul in terms of people coming back to the office. And they’ll only do that when employers and employees genuinely feel comfortable with all the aspects of returning to work: not just what happens in the office, but how people get there and back.”

Among the sectors that could benefit from  this new context are logistics, residential, and even retail. “I would think that retail parks, for example, in the UK, will come out relatively well from this, compared to other sectors in retail, because in fact, they are both Covid and internet friendly, given that you get free parking and plenty of room to socially distance”.

Long term leases vs short term coworking vs headquarters

The trends we’re seeing now have actually been present in the last couple of years, says Paul. 

The next generation of office buildings may appear the same externally but they will be quite different internally with more fluid  combinations of long term and short term leases, more circulation space, anda wider range of services provided by landlords. Basically, more traditional developers will integrate what the coworking operators have been doing. 

Paul talks a lot about adaptation, fluidity, and bespoke arrangements. Office buildings will be used differently  with , long term leases  adjacent toto coworking areas and shorter term leases.

Suddenly, it’s so much more obvious how you need to behave to be a successful owner and operator of real estate  in the office sector. There’s no doubt that it will be necessary for owners to have a much more granular relationship with everyone who uses their buildings, not just two or three key senior people in an organization, but all the users. To do that, you need much better data to be able to capture and interpret. And if you’re going to make the most of that data, then, of course, you’re going to need more sophisticated digital platforms that enable you to have a two way communication with a much broader range of people.

While it is too soon to have any real perspective on the longer term effects of the pandemic , there are two other things he expects to see: smaller city centre offices combined with suburban hubs on the one hand, and technology being used to give offices a new purpose and to help de-densify them – “offices will still be used for collaboration and team building, innovation and meetings. But they will be less about rows of people sitting at desks”.

However, in attracting customers, Paul thinks that the greatest challenge is for agents, as owners begin toin-source  more of the office leasing process. “They do a lot more work in house (…) and think they will end up using a lot of partners with platforms that can help them reach people through a level of digital connectivity they’ve not been used to.

The role of technology

Many companies are likely to decide to in-source a lot of their processes, but most landlords know where to draw the line between what they use an in-house team for and what they need advisors for. 

What  will facilitate this insourcing-outsourcing process will be the PropTech sector, says Paul. We are already seeing new technologies being integrated with real estate operations.

We’re using a video conferencing platform as we speak. And that already has had a tremendous impact on our demand for real estate this year. I think from all sectors’ perspective, it will be absolutely key to effectively collect data, within the rules, and to be able to use that data to understand how people use your real estate. Also, having that data allows you to have platforms that build a level of connectivity with people we haven’t seen previously. And that is true whether you’re in retail, residential, offices or alternative sectors”.

PropTech startups and big players

Will the changes in a technology enhanced future in real estate be driven by PropTech startups or big players? Who has more resources for research and development?

Paul thinks that’s more of a question of whether startups are absorbed into bigger companies or whether  they will prosper  on their own. Even if they are the ones that drive genuine innovation, access to resources might also mean being an integrated part of a larger entity.

“It appears as though there’s been more capital available for startups, which I think has been a good thing and galvanizing for the sector. The options  for big real estate owners are; what do they hold in house and to what extent do they use partners to provide specific services into their portfolios. 

The third dimension to this is the extent to which the big advisory community will also begin to in-house some of the tools they believe that their clients are going to need. But I think that it will be a mix mostly. I feel the genuine innovation will come from the startups. And then it’s the question of whether or not they stay as independent businesses or if  funding means they become absorbed by bigger entities.

The other problem owners will have is if you’re a smart tech person, you don’t need to work in real estate. And probably it will be quite difficult for the big traditional owners to do a lot in-house. They’ll be able to build those basic capabilities, but they will still continue to need specific services in the technology space from experts who only do that and can attract the skill and talent and reward the skill and the talent to work on specific projects. So the question then is whether those are genuine standalone businesses or whether they begin to get absorbed into larger entities”

Big real estate players will also focus more on technology in the sense that they might have a dedicated senior post for a chief digital officer or a chief technology officer, but Paul says that ”they will be there to try and scan the horizons and take advantage of what’s going on outside of the business. I think for the most part they won’t be able to build up the sort of innovation teams internally that will be big enough to source everything they want. Of course, they may gradually absorb some things in-house. but mostly they’ll be on the lookout for what’s going on externally and how to use that for the benefit of the business.

In the end, Bogdan and Paul switched roles and we talked about our scaling up, focus, and market approach. ”Looking at one market at a time is important in order to become the best in that market and to have a considerable market share. What we feel is also appropriate at this moment in time when everyone wants to get as much value as they can from the accelerated digitization of the real estate market, is to try to have pilot projects in different markets just to get a glimpse of how things are working in that market.”, added Bogdan.

To sum it up, we’re in for major changes in the way big real estate players approach the new trends. We might see them integrating startups or working more closely with  highly dynamic and innovative companies to keep up with all their customers requirements. Office spaces might change their purpose but, once again, technology can play an important role in this too l from  leasing and space design, bespoke arrangements through to an orientation towards a mix between short term and long term leases. These initiatives as well as a more coworking-style approach can be a winning solution for larger real estate companies. 

Watch the whole video interview with Paul Clark and Bogdan Nicoara here:

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