How do the places we call home impact on our health and wellbeing? That was the focus of our first event in Gowling WLG's How We Live series, where we brought together a group of experts from across the Living sectors to share their perspectives and latest thinking on how our homes, and how we engage with the places we live in, can help us to live happier and healthier lives.
We are witnessing a clear trend in the residential market – from student accommodation to senior living and everything in between, where operators are increasingly shaping their offering around the needs of their residents, delivering services and amenities that can make life easier and, going beyond that, actively promoting the health and wellbeing of residents.
What are the commercial and social drivers behind this trend? In short, why now?
To set the scene for wider discussion, Yolande Barnes, Professor of Real estate at UCL, provided a thought-provoking snapshot of the macro trends behind this shifting focus from the actual buildings to the people who live inside them. Co-founder of LifeProven, Jordan Relfe, followed with new perspectives on how we can approach measuring wellbeing performance in our buildings and communities.
From properties to people – shifting perspectives on where value lies
Yolande Barnes started out by highlighting how major health crises have long impacted and re-shaped the way we live, charting key events in history from the great plague of London to the 1918 flu pandemic. While the past two years may have seemed extraordinary, we just happen to be living through one of those pivotal moments, with lockdowns sending many of us to work, rest and play from the confines of our homes. But in many ways, as Yolande observed, this is nothing new, commenting, "we've simply gone from looms in crofts to zooms in lofts."
She described the impact of the pandemic as a "giant social experiment" that has helped to quickly identify what matters most to people about where they live. It has made us expect more from our homes and neighbourhoods – people want places in which they can live, work, play, visit, make, trade, stay and eat. She refers to this trend neatly as 'hypermixity'.
Without doubt the pandemic has catalysed existing trends – the enforced loneliness of lockdowns, the restrictions on outside exercise and on the use of shared facilities. All of these things have helped to raise awareness and demand around the need to focus on the health and wellbeing of residents both in terms of building and scheme design and in terms of the services available to residents.
This change in the optics of how we view residential property has the potential to be a radical departure from the traditional commercial norms of the wider real estate sector, and one that many in attendance at our roundtable discussion described as more akin to a hospitality business model, where the focus is on service delivery and the 'customer' experience. It's certainly true that in meeting the appetite among residents to get more from the places they live, real estate can learn a lot from hospitality and retail. If they can do this successfully, the rewards are there for the taking.
Those already providing a distinctive and enhanced offering around health and wellbeing, as well as sustainability, are using this both to attract and keep residents. This focus is likely to become a value driver as residents become willing to pay a financial premium for the lifestyle benefits on offer. Indeed, as people increasingly expect these attributes as the norm, we are likely to see the emergence of a two-tier market with so-called 'green premium' residential offerings striding ahead of 'brown discount' developments.
Barriers to delivery
Rewriting the commercial rulebook in delivering residential developments with a focus on resident experience over bricks and mortar is not something that can be delivered overnight, and there is still a lack of clarity on what 'good' looks like and, at least in the short term, what people are prepared to pay for it.
There are genuine concerns around cost, but with a clear recognition and understanding that this shift to resident experience and service delivery will demand a different operating model. Equally, those with an existing portfolio of purpose-built residential assets are concerned about the flexibility to 'retrofit' wellbeing into their developments.
Jordan Relfe at Life Proven provided some reassurance on this point when he talked about what effective wellbeing really looks like in a residential development. "Improving health and wellbeing for residents is often about keeping things simple and focussing on the things where you can add most value, such as natural daylight, ambient temperature, green space, storage and spaces to facilitate social interaction. Just because it isn't possible to tick all of these boxes does not mean that you can't improve quality of life in some key areas."
A data-driven future
With ESG at the heart of its offer, LifeProven has spent the past four years developing its RE Wellbeing Metric to comprehensively measure the impact of real estate assets on health, wellbeing and quality of life. The venture was born out of a genuine commercial need for this information to underpin ESG linked investment, development activities and finance.
In his presentation, Jordan Relfe focussed on the commercial realities, highlighting how developments focused on the health and wellbeing impact on the end user are performing better financially and helping to inform future decision-making. He explained: "Being able to identify key insights and trends about how the building is impacting on residents will help to inform design, operational, acquisition and divestment strategies."
It seems you can put a price on health
The promotion of health, wellbeing and happiness are all laudable aims in the creation and operation of residential developments, but the key driver in making this happen is far more about shifting commercial dynamics than a moral crusade. There is a financial imperative to respond to new and emerging demands in the market, switching focus from creating buildings to establishing places where people can truly live well and thrive.