By Richard Pickering, Head of Futures Strategy
Austerity? The recent scrutiny of the cap on public sector pay increases creates renewed focus on the bifurcation of fortunes in the modern UK. Even within the Conservative front bench opinions are split, with Boris Johnson notably calling for a release of the cap. The public sector is to a degree insulated from the fortunes of the market, suffering less earnings reduction for instance during the financial crisis, but benefitting less from the subsequent recovery. However, a report published recently by the Office for Manpower Economics paints an alternative picture. Whilst acknowledging a real pay reduction of 5.8% between 2005-2015 across all occupations, the decline was found to be shallower (3.1%) in Pay Review Board occupations (45% of all public sector roles) than in comparable non-PRB occupations (6.1%). Meanwhile the latest ONS bulletin shows that local government employment is at its lowest since records began, whereas central government employment is at its highest.
Mobilising ‘We’re going to make some history together today’, announced Steve Jobs ten years ago last week, as he unveiled the first iPhone. How right he was. But this was never about a phone, or for that matter an iPod; the iPhone’s success is that it was the first device to truly popularise mobile internet. The ability to coincide location-based activities with internet access has changed how we live, from exploring our location using maps, searching for reviews of nearby restaurants, paying at tills using e-wallets and having the convenience of ubiquitous access to apps and browsers. For business, the ability to get location tagged data has also been a driving force for big data platforms. The next big leap for the iPhone, as signposted in the iOS 11 beta, will be augmented reality. For real estate this means augmented mock-ups of space, virtual measurement of buildings and a step toward truly digital meeting rooms.
Fag end Something else celebrating its 10-year anniversary this week is the smoking ban across the UK, since which time the number of smokers has fallen by 1.9m. Since the ban was implemented the number of pubs in the UK has fallen from 57,000 to 50,000, but the causes of this are obscure and among some customer segments (particularly families) there has in fact been an increase in pub goers. Earlier this year there were calls to extend the smoking ban to council tenants; an existing requirement under many private rental agreements. The number of tenants wanting the right to smoke in their own homes is greater than the proportion allowed to do so, and so perhaps herein lies an opportunity for private landlords. However, offset against a wider pool of tenants is the potential cleaning and decorating costs that aren’t always met from a deposit.
Drone nests The future of warehousing may look very different from the single storey structures popular today. Airborne drones take away the requirement for ground level docking, as can been seen in Amazon’s recent patent for a ‘multi-level fulfilment centre’ somewhat resembling a bee-hive. The previous inflexibility of this requirement has meant that warehouses have had low spatial density, and have tended to occupy low value land. The ability to build high rise warehouses, coupled with an acceleration of last mile logistics requirements may change this paradigm. That is of course if the warehouses of the future even need land. Another Amazon patent sees distribution depots operate out of Zeppelin devices flying at 45,000 feet. At this height, according to s.76 of the Civil Aviation Act, there is no right by a landowner to an action in trespass. Could this be a new category of real estate in the future?