How charm impacts real-estate profits

16th September 2015

THECUBE, which is a coworking space in East London, sits right in the middle of Shoreditch and Spitalfields, we are very lucky to say that our area is vibrant, interesting, and open. The area still maintains a high density of small independent businesses and a diverse population, which add different textures and tones. People from all over the world are now attracted to this area as they find charm in the local curiosity shops, the independent barbershops, the many well designed coffee places and our communal green areas.

These places create moments and experiences that allow people to interact with the city in a tangible way. Even on weekdays, this area’s green spaces are filled with people taking a picnic lunch bought from one of the many local food markets, creating a culture which attracts people for both work and pleasure.

Sadly, this is now attracting developers who want to build high rises with bland squares, hoping to cash in on the area’s charm. However, they are missing the trick, a very expensive trick.

Anyone that studies development knows about the value of dwell time. Dwell time is how much time people spend in a location. The reason it is important, is the longer you spend time in an area the more likely you will build a bond with the area, understand its culture, become a greater part of it’s culture and a by-product of this is that you are more likely to transact financially in the area. Commercial/retail transactions are developing greater opportunity cost – such as millennials and teens decreasing in the expenditure on clothing (as shown by a recent dip in sales) and as such dedicate hard earned income in places and on things that have a long term value – personal websites, smartphone tech, and educations. Why should our physical surroundings of the high street/urban built environment not be reflective of this? A locally proud area is more commercially sustainable, such as the residential urban village. Employees of businesses in “dull” areas are not retained as they look to seek things better – work is where they spend the majority of their lives, if unhappy and moderately skilled there are always options. Happy employees are also busy, productive and better retained, thus a better benefit for an employer, and in turn for the property owner who has a better chance of keeping the tenant for a longer period of time and reducing unwanted gaps in occupations on properties that were incredibly expensive to build. Build bland or cheap and you, pay twice as much.

Dwell time for this era is based on “charm”, that is an area that has interesting architecture, diverse stimuli, a sense of locality and culture. High rise buildings with bland, nondescript facades and closed street level environments are the opposite of this, which makes an area as functional and supportive of the human-less and brutalist council estates now being torn down across London and the UK in the wake of the evidence that they breed a negative and oppressive culture to their inhabitants, only this time we’re seeing it in the form of glass and steel rather than concrete with a clever PR culture behind it.

In short charm makes an area “less boring”. Using boring in this context is not about being spoiled or entitled, we mean this in a more scientific and social context. In a recent article in AEON magazine, described the impact of “boring” buildings. They did a detailed study, which timed the speed of people when colliding with a boring facade versus an interesting area filled with diverse stimuli. In the boring facade people walked faster. His article goes further into the mental damage of boring environments, which we think is important. However, given that many in the real estate industry think only in dollar and cents. We shall stick to this theme.

If people are avoiding or ushering through an area due to poorly curated architecture, then it is not creating a dwell time for people to stay and consume. The more research is done in how this generation interacts with their built environment, the more evidence arises that we need to create smarter, more humane, and stimulating cities. The idea that buildings shape us has been around since Churchill. It is time that we push this industry forward and make the relationship between the built environment and the human stronger and equal.

We believe there is a science in making cities and spaces “less boring” and more enriching. If you want to join the discussion, we will be doing a talk at Digital Dumbo on Smart Spaces, which will go more in depth on the neuroscience behind creating smarter buildings.