Dr Andrea Blake brings a wide range of real estate expertise to the table in this episode, with research in such diverse topics as the impact on rural land values of carbon sequestration to the outcomes of projects involving seniors living being created on school campuses.
But following recent articles about what she sees as longer term trends arising out of the pandemic on the real estate market, we thought we’d get her on the pod and dig a little deeper. And as we did so a consistent theme emerges – that of structural change being under way which will see a broader distribution of commercial activity throughout greater city areas and a stronger focus on local community.
If you haven’t realized already, this podcast is a shallow attempt by me to enjoy the thinking of people who know much more than me on topics I am deeply interested in. Please share that with me now. Here is Dr Andrea Blake, Senior Lecturer in property economics, from the Queensland University of Technology.
This is an AI generated transcript. We find it to be reasonably accurate, and a helpful reference point, but it is not, nor is it intended to be, an exact transcription of this discussion.
Alister Fitzgerald (01:36):
Welcome to the Field trip podcast about the future of commercial real estate, the future of law and everything in between. Today, we are joined by Dr. Andrea Blake from Queensland University of Technology Business School, where Andrea specializes in commercial real estate. Andrea, welcome.
Andrea Blake (01:55):
Thanks very much, Alister.
Alister Fitzgerald (01:57):
Perhaps to start, if you could give us some context about what you do at QUT, perhaps how you got there, backstories are always interesting, and some particular areas of focus both before the pandemic and at the current time.
Andrea Blake (02:11):
Yes, certainly. So I've actually been at QUT for quite a long time. It's been around 18 years. I was a student at QUT. I was actually one of the first property economics students at QUT when property was introduced 30 years ago. And we're coming up for our reunion very soon.
Alister Fitzgerald (02:27):
Andrea Blake (02:28):
Yes, very exciting times. So after that I went and I studied law and I worked as a property valuer, became a registered valuer. And I now actually sit on The Valuers Registration Board of Queensland. So as far as things have changed, most of my research I've just continued on. I did my PhD in carbon sequestration and the impact on rural land in valuation practice.
Andrea Blake (02:58):
So it actually couldn't be further from commercial real estate. Following that I have probably the most exciting thing that is a project that we started this year, which is a National Health and Medical Research Council sponsored project on intergenerational living, where we're looking at repositioning senior living on school campuses and the benefits that that has for both generations.
Alister Fitzgerald (03:25):
School campuses at what level? All levels or tertiary focused?
Andrea Blake (03:31):
No. Secondary and possibly primary. So it's interesting. It's a really diverse group of researchers involved in that project from architects to lawyers, property people, planners, health scientists looking at the health benefits of this. So it's been quite an exciting project. I think it's been a little slowed down by COVID, but we're really getting stuck into it now.
Alister Fitzgerald (03:59):
So how far are you progressed? Are you starting to get some signals from the research you've done so far as to the kinds of conclusions that you'll draw on that? I mean, just a theme of the discussion that we're looking to have today, which is about COVID, obviously underlying all of that is fundamental and structural change or what might happen. What you're talking about here, is that in a different format, or certainly not triggered by COVID? So what are you seeing so far in that respect? That sounds really interesting.
Andrea Blake (04:31):
Well, I feel like we won't have true completion on the project until we have at least one of these facilities built. So we haven't actually captured the benefits at this stage, but instinctively there's a lot of benefits that we can see to both generations, particularly as far as COVID is concerned.
Andrea Blake (04:51):
We've seen that COVID has really impacted the vulnerable groups in society, and one of those vulnerable groups are people in aged care facilities. So we're hopeful that this senior living option will allow people to stay healthier and age in place without having to enter into those sorts of aged care facilities.
Alister Fitzgerald (05:11):
And where are the projects coming online or likely to come online and what parts of the world? Are they local? Are they sort of European? It sounds something like Europe would do first before us.
Andrea Blake (05:24):
Well, I think there are some examples of projects like this in Europe, but they will be local. So they'll be around Queensland. It's probably too early to talk about exactly where, but yeah, quite exciting.
Alister Fitzgerald (05:35):
That's interesting. I'm trying hard not to get sidetracked here. Perhaps I'll have to grab you at a different time to talk about that. But it's just the whole I think also of build to rent as another theme. So a new asset class coming in and how that's changing, in a different sense, the way people might live. And wow.
Alister Fitzgerald (06:00):
Yeah, I'm going to have to come back to you on that one at another time. Interestingly though, or interesting to me, you mentioned all these different people that feed into a research project like that. How does that actually come about? Is it all QUT based? Is it a core at QUT and others coming in? How does that all work?
Andrea Blake (06:20):
Well, I think the impetus for this project was actually driven through a local architecture firm, in particular Mark Trotter. The idea basically came about through projects that had been undertaken in that firm and with connectivity with QUT researchers as well.
Andrea Blake (06:43):
I think it came about actually through the architecture team at QUT and a lady called Marissa Lindquist, who has been involved with Mark Trotter in a teaching and research capacity. So from there, our team was built around that central idea, and that's generally how a research project would be advanced. It would be a couple of people come up with an idea and then look to build a team around a project.
Alister Fitzgerald (07:08):
Interesting. I look forward to hearing how that progresses. I'd love to hear more at a later point. But that's a neat transition to something I wanted to ask at the outset. When we're looking at the impact of COVID on the real estate market, there's a lot of press on people's views on how things are going; some of it anecdotal, perhaps some of it a little bit more substantive. Where are we at in terms of the breadth and quality of data that we have available to start analyzing the current environment and perhaps extrapolating on that for where things might go?
Andrea Blake (07:49):
Well, it is such an uncertain time that we're in at the moment. And I think unfortunately a lot of the data that we're getting is quite anecdotal. I'm seeing that a lot of the information sources that are appearing in media and other more anecdotal information sources are really those with vested interests. It might be developers who are just bringing a building out of the ground, who are painting a far more rosy picture than what we actually have about commercial office buildings.
Andrea Blake (08:22):
It's difficult to act. And there hasn't been a lot of property transactions. So there's not a lot to report on in a lot of cases. And I think, too, we're in a situation that we're really not going to know or be able to ascertain the real picture for some time, because those companies who are in leases of significant commercial real estate will continue to pay their rent.
Andrea Blake (08:45):
They'll still be in that lease. But it won't be until the end of the lease term when we'll know exactly what their next move will be. Is it to downsize or are they seeking to move to a different location? So I think a lot of those decisions may have been made, but haven't been implemented at this stage. So I think it impacts on the amount of data that we can actually collect.
Alister Fitzgerald (09:08):
Okay. I'll have to sort of have an anecdotal discussion at this point. You mentioned sort of your valuation background or underpinning, so you're sort of very strong in that area. I mean, you've already said there's a lack of information out there. So what does that do to the valuation process? What might valuers be going through? What might institutions who have obligations to undertake valuation processes, what might they be doing at the moment with an absence of reliable information?
Andrea Blake (09:49):
Well, I must point out, I'm not actually a practicing commercial valuer. So what I'm hearing though is that there's obviously a lot of disclaimers in valuation reports highlighting the level of uncertainty in the market. I think, too, there has been more frequent valuations than would otherwise be undertaken. So I think in some respects there's a lot more valuation activity happening than what would normally be undertaken.
Alister Fitzgerald (10:16):
Over the COVID period or as a trend in the market generally? Because I've noticed that trend for a while, people even quarterly or more often having to revalue portfolios, which seems a bit ridiculous. But you're saying in the COVID period more frequent valuations?
Andrea Blake (10:31):
Yes, more frequent valuations.
Alister Fitzgerald (10:34):
How does that work in an environment where there's an absence of new reliable data to underpin them?
Andrea Blake (10:43):
That's a very good question. I mean, to some extent, valuers are obviously relying on transactional data to undertake their valuations. If there isn't a lot of data, then I guess their valuations are a little bit more uncertain and hence the disclaimers in their report. In certain sectors of the market, I think possibly the market had become a little bit overheated and there obviously has been a correction that has been made to valuations, particularly in the retail environment.
Alister Fitzgerald (11:24):
Yeah. Again, as you said before, it might be a little while until we get some more understanding of where things are going to go from a valuation perspective. So that'll be an interesting space to watch. With the information that we have then, let's sort of take a step back and look at some broader trends. You've written a great article in June or July of this year available on QUT's website.
Alister Fitzgerald (11:50):
We'll pop a link in our show notes for this episode about that. And you were pointing out some trends at that point. Things have changed since then. I'm keen just to get a sense from you, perhaps both in the office market and the retail market, what it is that you're seeing or observing. Again, what do we see now? Where might that go?
Andrea Blake (12:15):
Well, I guess anecdotally, I think there has been a shift generally from centralized CBD environments to more decentralized environments; I mean a lot of people working from home. So we've seen a lot more vacancy in the environment, in the CBD, whether it's in retail or commercial. And I think it's interesting to note, too, some of the predictions that I made in that earlier article I've completely changed my mind on, particularly when it comes to co-working spaces.
Andrea Blake (12:42):
I really thought that the pandemic would mean the death of co-working spaces, but I really have changed my mind there. Because I think for a lot of people working from home, it's not what they want to do either. So co-working spaces give people the opportunity to have another environment where they can actually interact with people and form social networks in a sort of more micro community rather than being in the CBD building.
Alister Fitzgerald (13:14):
I suppose, too, for business owners who would otherwise have had a centralized location all under their own lease, it would offer a flexible outlet for their space requirements as well, even in a centralized location, but perhaps more geographically spread.
Andrea Blake (13:37):
Exactly. I think some companies must be considering that there is a risk with having their entire team under one roof. So having the team more geographically dispersed does reduce the risk in a pandemic.
Alister Fitzgerald (13:52):
Oh, I see. So from the perspective of saying, well, for example, we have our head office in Melbourne and we've seen what's happened with Melbourne and how they've been more severely affected than other parts of Australia. So perhaps that's not sensible for any one location to be the critical mass of our sort of ours, by number or by sort of key members of the team. We might spread them geographically more readily. Is that where you going?
Andrea Blake (14:21):
Exactly. It does tend to provide a bit more protection against if there is any infection.
Alister Fitzgerald (14:29):
Yeah. I've had some recent discussions as I was sharing with you before we turned the record button on. I've had some discussions with a couple of tenant rep organizations as part of this series of podcasts focusing on the pandemic. And it's interesting to hear about their clients who are making decisions now and what it is that they can commit to and what they can't.
Alister Fitzgerald (15:02):
And I suppose there was a time when I was having those discussions where people couldn't come to the office. And so it gave a certain amount of flexibility for those business owners to be able to not have to make a decision now, but I guess as people do return to work, touch wood, and we start to move through this, it will be interesting to see where people in similar positions will be making their decisions as to what their office looks like, which I want to unpack a little bit more as well because I think that that's quite a fascinating discussion.
Alister Fitzgerald (15:39):
You touched on remote work. What do you think... I mean, I've spent time in a WeWork. I'm actually a big, big fan of their model and it's a great place to work. It's a great environment. And I've seen a few places around Australia as I've traveled for work that's been quite good, but they're all or largely all in CBD areas. Do you see these types of facilities spreading out into more suburban locations?
Andrea Blake (16:12):
I do. I think there's a benefit in having more localized coworking arrangements. There's a benefit from obviously connecting with your local community and developing that micro-community. But also I can see that there's a benefit even from the childcare. There's a flow-on effect there if childcare can be localized as well. But there's even a movement now to have coworking spaces included in residential developments.
Andrea Blake (16:44):
So an apartment complex or maybe an apartment precinct could have tennis courts, pools and coworking spaces. And I really can see the benefit of having that localized community and also having an environment to work which is close to home, but away from your actual home where there are many distractions.
Alister Fitzgerald (17:06):
So we're getting into this idea of a fragmentation of workplace. What's your broader view then? If you're sort of looking into your crystal ball now, what are some of the macro... You're touching on a few of them. But paint the picture of what you think things might look like in sort of a 5 to 10 year time horizon.
Andrea Blake (17:28):
It's interesting because there's been so much emphasis on the central business district and. And we've all headed off into our CBD offices. QUT has a wonderful campus in the CBD. But I can see that those environments may still exist, but the function of those environments is likely to change. I think for many businesses, we've proven that we can quite effectively operate remotely.
Andrea Blake (17:56):
So I think there'll be more of a shared work environment between either the home or a localized workspace and a more centralized area where people perhaps go to learn and socialize, but not necessarily a desk that you're sitting at for the entire workday doing your work.
Alister Fitzgerald (18:16):
It strikes me too, one, as someone who's interested in the real estate industry and is interested in seeing examples of good development. It's easy to find things that don't meet that requirement. One thing I have always struggled with is orphaned retail strips or retail pods at the bottom of high rise or high density residential.
Alister Fitzgerald (18:44):
They always seem to be very difficult spaces to fill, particularly where that residential isn't already in an area that's got a lot of traffic, which is common. Do you think that we're going to start filling in some of these empty spaces and perhaps by a greater a variety of uses in these developments we might start to solve a few of those problems?
Andrea Blake (19:06):
I hope so. If the retail spaces are utilized, then I think there's the perfect opportunity for co-working space or some other type of service which is necessary for people who are working locally.
Alister Fitzgerald (19:22):
That's... I'm sorry.
Andrea Blake (19:24):
Maybe I haven't answered your question.
Alister Fitzgerald (19:26):
No, no, no. My mind is just spinning here as all of these ideas are coming through. I wanted to go back to the... We were talking about these broader trends with office and retail. And I'm interested, we're speaking at a general level, but perhaps if we could break that down into a few segments and see whether we're seeing anything different particularly around industries or sectors.
Alister Fitzgerald (20:01):
And if I think on the office side, I've heard different feedback say from government and private sector in terms of what their future use might be or desires might be from an office perspective. And then if we flip to retail, I think there's... I mean, it's easy to say, "Oh, well, retail is a struggling category."
Alister Fitzgerald (20:22):
But there are many different offerings within that or tenancy categories within that. I think some are perhaps more troubled than others. Are you seeing or do you have any views on perhaps either of those distinctions in how they might play out differently?
Andrea Blake (20:39):
It's interesting. I mean, retail as an asset class I think with the pandemic has been winners and losers there, as there has been in many other sectors. Obviously, the CBD retail has been impacted quite significantly in major capital cities. I mean, Brisbane is one. However, it doesn't compare to what's going on in Melbourne as far as the impact on CBD retail.
Andrea Blake (21:08):
But the more localized shopping, the convenience centers have been performing particularly well. So there are winners and losers. And I think, too, the regional shopping centers have been attracting quite a lot of people as well. There hasn't been a big impact there either. And I don't necessarily know whether that's been translating to retail sales, but there's definitely people through the door.
Andrea Blake (21:35):
So, once again, it seems to be more locational. And I think there are challenges ahead for retail, but I think they were happening anyway, really, with online shopping becoming much more of a factor in all of our lives. And I think the COVID shut down has meant that many people who perhaps wouldn't have done online shopping now are. So I think that has just exacerbated a trend that was already happening.
Alister Fitzgerald (22:03):
So those sort of significant size, regional type shopping centers, what are they going to look like? How might they change? I've got a few ideas about things that might repurposing in a way. There are significant structures I don't... I don't get the sense in Australia we are as over serviced as say the U.S. market in shopping mall space, even though we have a lot of it. So touch wood, I'm hoping not abandoned centers, but I can see some changes there. Do you have any thoughts there? I might throw a few of mine too as well?
Andrea Blake (22:38):
Yes, certainly. Well, the changes have been happening for quite some time. I mean, the component of actual retail in these centers has been diminishing and the other services, whether it's entertainment, cinemas, climbing walls, whatever else, and professional services and banks and things like that. The other services have actually been increasing.
Andrea Blake (22:59):
So you're now talking about a regional shopping center as being a standalone precinct that is more like a community rather than your retail center. So that's been happening for a little while. And I think maybe the centers in the CBD haven't been keeping up with that trend either.
Alister Fitzgerald (23:19):
It feels like they serve a slightly different purpose though than suburban centers.
Andrea Blake (23:25):
Definitely. And then also transport hubs. Let's not forget that. So the regional shopping center is more than a shopping center.
Alister Fitzgerald (23:35):
I mean, personally, I've always had a view that they're underutilized in that sense, particularly as someone who has left the CBD and gone and used to live right next to one of the major shopping centers or near enough in Brisbane. I thought it was a missed opportunity. It'll be interesting to see how that unravels. I said I had a couple of thoughts, some things that I think about are cinema space, for one.
Alister Fitzgerald (23:59):
That particular industry category is under threat for a lot of reasons that have nothing to do with COVID. But I find it hard to believe that there won't be a lingering concern about closed, proximity spaces like that. So a lot more people would more readily watch something on a streaming service than go to a cinema. We're already starting to see some decline or some pretty significant decline in different parts of the world around that sector.
Alister Fitzgerald (24:34):
My view, for what it's worth, just looking from the cheap seats, I don't think that will come back and correct itself. So if we take that as an assumption that we have a part of these major centers that's significant in area, but is also detached from the typical traffic. They're often on the side. They're a destination in themselves. They don't rely on traffic.
Alister Fitzgerald (24:53):
That presents an interesting challenge and opportunity in these regional community hubs, as you described them. So, things like - you mentioned aged care before. People have often spoken about residential on top of these sorts of developments. Education I think is an interesting one as well. Co-working, another one that I think is interesting. And even back to perhaps something slightly different, logistic hubs or micro hubs.
Alister Fitzgerald (25:32):
I hadn't looked in detail at it, but I did hear some headlines about Amazon and Myer having some kind of arrangement whereby Myer was going to be a collection point or a delivery point for Amazon. I can't imagine that will end well for Myer. But all of these different things. I get excited about new ideas. They would be great. So I'm keen to get your thoughts on one or more of those. But perhaps with the question at the end of, at the end of the day, landlords still have to monetize these spaces in some way. So how does that shake out?
Andrea Blake (26:09):
Well, it's an interesting one because there is so much investment in these spaces. And for all of us, with our superannuation funds, there's so much investment in these spaces. But I think you're onto something there with the alternate uses. I mean, there's no reason why regional shopping centers couldn't be mini distribution centers and they couldn't be even hospital sort of facilities, day hospital facilities, co-working spaces.
Andrea Blake (26:37):
There's lots of opportunities. I think if there is issues in having additional space identified because of cinemas, they take up a lot of space, then landlords are obviously going to be looking at how they can actually get the most from their assets by way of return. So it might take a bit of creative thinking. But it's interesting. The one thing that I love about the decline in cinemas is the fact that there are now drive-ins again. There's a few drive-ins around the place, which is a good use of leftover space.
Alister Fitzgerald (27:15):
Everything that's old is new again. I love it.
Andrea Blake (27:18):
Alister Fitzgerald (27:20):
I can't remember the last time I went to a cinema. My kids are not really into that kind of thing. So if they're not into it, I never get a look in. So I hope it doesn't totally disappear by the time I get to come out the other end of that particular cycle. Perhaps a shift in direction then, we've been speaking a bit about office, speaking about coworking.
Alister Fitzgerald (27:45):
How will office design change in terms of office layout, usage? And I suppose I'd look at this, in my head, it sits in two levels. One of them is what does the physical unit of an office look like? And we've touched on a few themes here already. It's currently CBD focused, concentrated often inner city.
Alister Fitzgerald (28:12):
You've touched on some ways that that might change. But then as a secondary layer, what does an internal office layout look like? Does it change? I think they're two really interesting areas. Do you have some views on either of those?
Andrea Blake (28:27):
Well, I think the extent of change really does depend on how long we are in this COVID environment for. And if this is continuing into the future for quite some time, which it's likely to, then I think inevitably there will be a change in office design. So I can see things like wider hallways, more space per person, because obviously the workspace has been shrinking quite a bit as well.
Andrea Blake (28:54):
And we've got down to a situation of hot desking and sitting quite close to other people. So I think that will change. And also things like ventilation systems. I think windows that can be opened would be preferable. Outdoor meeting spaces, if we can do it, and we could certainly do it in Southeast Queensland. The other thing is also the height of office buildings.
Andrea Blake (29:19):
I think we've been really going for iconic skyscrapers as our prime office buildings. And I can see that there is a certain vulnerability there because people don't want to be in lifts. So either we have a situation where we have more really efficient lifts to transport people more quickly or we opt for buildings that are a little bit more walkable, maybe with more stairwells that people can walk between levels without being in a lift.
Alister Fitzgerald (29:51):
It sounds like something that is part of a trend towards the suburbs as opposed to a refitting of a CBD. It's hard to bring them to a level level, I suppose. But I hear you on all of those things. I had a good friend who was at a local architecture practice in Brisbane, and they had the office, for those that know Brisbane, it was on the corner of Adelaide and Albert Street right across from King George Square.
Alister Fitzgerald (30:29):
And they had a terrace going out such that they had probably half their footprint inside or maybe two thirds inside and then one third outside. And during the day in the middle of the CBD they'd have all of their doors open and be naturally ventilated, the whole office would open up. And that was an amazing place to work, although I guess that physically is relatively unique in the CBD.
Alister Fitzgerald (30:56):
I mean, the comments you make about ventilation systems, I'm seeing a lot of press at the moment. So if you look in the sort of the prop tech space, I'm seeing a lot of discussion about contact-less entry and exit. Rapidly increasing sophistication of ventilation and hygiene systems.
Alister Fitzgerald (31:19):
It's an area that certainly never sounded sexy previously and not a huge amount of effort put into it, even though there were sustainability standards of what would start to look at those kinds of things. I'm guessing those levels and standards that need to be met.. Sorry. Those standards that need to be met will be something that significant tenants will be mandating in their lease negotiations and arrangements from now on.
Andrea Blake (31:52):
I agree with you, Alister. I think that's going to be really important in giving staff the confidence to go back into office buildings. Because for some people it's been quite a long time. I have spoken to a number of people who haven't set foot inside their physical office environment since March. So that's over six months now of working from home.
Alister Fitzgerald (32:12):
Well, I mentioned to you, again, just before we started recording, that I'd spoken with three younger lawyers, all living in London. And despite I think all of them having the opportunity to go back to the office now, all of them continued to work remotely and hadn't been back to the office for various reasons, but no rush to return on that front.
Alister Fitzgerald (32:35):
You made an interesting point there about the things that employers will have to do or they might do to get people to come back to the office. What are the grab bag of ideas or incentives you think that employers are going to need to do to bring people back? I suppose that's a loaded question. There's an assumption in there that employers are going to want people to come back.
Alister Fitzgerald (33:00):
I think there will be some equilibrium that doesn't involve everyone working from home. And so there will be a desire of employers generally to bring people back to a greater extent than they are at the moment. So I suppose, one, do you agree or disagree with that? And tell me why I'm wrong if you disagree. But if you do, what can they do?
Andrea Blake (33:19):
It is an interesting point because I think many people are actually quite sick of working from home as well and they long to be back in the office environment. So I think really for a lot of employers, it's very dependent on geographically where they are. I mean, I think in Brisbane, there's a lot more confidence in people being able to feel safe in the office environment.
Andrea Blake (33:44):
So there's probably less coercing that employers have to do. But it does come down to safety. So I think if employees too can be convinced of the benefits of going into work, there are opportunities to socialize or to connect with their peers. I think that's going to help the situation. Because essentially we lose a lot of time in travel each day to be in an office environment. And if there's seemingly no benefit, then people won't want to do it.
Alister Fitzgerald (34:19):
Sorry. But do you think that's the key factor here? My view is that the one thing people are realizing is how wasted a life is when you spend a long time commuting. And that perhaps is one of the key factors perpetuating this work from home trend. Do you have a view on that?
Andrea Blake (34:41):
I do have a view on that. I think there's obviously a lot of time in the commute, even if you live quite close to your workplace. But I think, too, a lot of people, even in areas where there isn't a particular problem with COVID at the moment, a lot of people don't feel safe on public transport because there's not the ability to socially distance in any way. So I think having CBD location also means that people are more compelled to catch public transport.
Alister Fitzgerald (35:13):
That's a government challenge though. And opinions might vary on this. You might disagree with me. But I'm a big advocate of public transport. We've always been a one-car family. I catch public transport where it is sensible to do so and always have. But people aren't doing it now. Is that coming up for discussion at the moment? There's just a long list of issues the government is dealing with now. Are you hearing anything about ridership and any thoughts starting to percolate about getting people back on public transport?
Andrea Blake (35:50):
Interestingly, I'm not. Alister, I agree with you. I'm really an advocate for public transport as well, and I'm certainly not an advocate for a car centric society. But I don't know that at this point a lot has been done to get people back on public transport. I did hear something about offering free transport, although I don't think that that's come to fruition in Brisbane. But I don't think that that's really been... I'm sure it's been considered, but there's no strategies being obviously implemented at this stage. I don't know of doing anything differently.
Alister Fitzgerald (36:29):
No. Well, I'm guessing that there are bigger issues to be dealing with at the moment. And I hope that one comes onto the agenda at the appropriate time. We've touched on a few points here about... And again, as I said earlier, the underlying premise of the discussion is one of structural change and the impact on the city, how the city, as an organism, I suppose, is going to change.
Alister Fitzgerald (37:04):
We've spoken about CBDs and how perhaps their significance might differ. I've heard some interesting commentary about people talking about major world cities. For example, they would say, will New York come back? Will it continue to be what it always has been or London or any major major center like that, or indeed Sydney as well? The consensus view, within my echo chamber at least, for what that's worth, the consensus view seems to be that they will come back.
Alister Fitzgerald (37:43):
There's something about cities like that. They've survived significant impacts over centuries. And so they'll certainly come back again. And I think that's probably true. I think there's something magical about those major cities. But then being a parochial Queenslander and with Brisbane, I wonder if it doesn't happen to the same extent, if the sort of center of business powers tends to be a little bit more spread out through the city, does that change Brisbane? And if so, in what ways? And is that a good or a bad thing?
Andrea Blake (38:23):
I think they will inevitably be changed because I think we have focused all of our attention on living as close as possible to the CBD. And that's been where the most desirable suburbs have been, in a ring. But I can see that there will be an emphasis on the suburbs and alternate business districts. I actually think that's a good thing for the city because it does add to the walkability, the sort of local commute, the enhancement of community.
Andrea Blake (39:01):
I think it's inevitably a good thing. I agree with you. I don't think we'll see the death of New York or London or any of those big cities, or even, dare I say it, Melbourne will bounce back. But it's going to take a little bit of time before people are confident in that environment. But I think it's interesting the way a lot of people don't feel so compelled to be living close to their CBD workplace.
Andrea Blake (39:29):
You can see by what's happening with property prices at the Sunshine Coast where we've had people buying them almost sight unseen from Melbourne to move to Noosa, or even Brisbane people deciding to relocate because they've decided that they can work just as easily from a suburb in Brisbane as they can from the Sunshine Coast. So I think there's going to be activation.
Alister Fitzgerald (39:50):
We've all thought of that though, haven't we? Surely. Don't tell me you haven't.
Andrea Blake (39:54):
We all have.
Alister Fitzgerald (39:57):
I guess the point I was thinking about is... And being someone who did university in Brisbane, started my working career in Brisbane, and then fled to Sydney and then other parts of the world and then came back. And seeing there's a benefit, I think, in terms of business activity in having a vibrant place that young people are wanting to come and work in.
Alister Fitzgerald (40:27):
And so I totally get the benefits that come from a more distributed, walkable, sustainable existence. And personally I've sort of subscribed to that. But then I wonder, does Brisbane suffer more? Is there a bit of a shift in that critical mass of energy and youthful innovation and enthusiasm that perhaps vibrant economies require, or am I just being overly negative? Do you know what I mean?
Alister Fitzgerald (41:00):
Perhaps people might do university here and they're gone from day one. They don't share the first few years of their working life here and they don't come back as quickly as they might. They don't go and do a few in London and then come back. We might lose them more readily. We get less people returning, which I don't think is a good thing, or maybe they like the walkability and they come back.
Andrea Blake (41:23):
Yeah. It's interesting. It kind of interestingly has brought a lot of people back to Brisbane. But I understand what you mean about needing a vibrant place for people to socialize and gather. And I think, too, we are really a river city, so we're still very focused around the river and the entertainment precincts around the river. So I think that sort of vibrancy of the CBD hopefully will be maintained.
Andrea Blake (41:52):
But I think inevitably there will be some repurposing of existing structures just with the change of use or change in demand. I think that's inevitable. But I still see it will be a vibrant place.
Alister Fitzgerald (42:08):
Yeah. I suppose I think of it as you've got this engine room of innovative, cutting-edge organizations, which, again, as a parochial Queenslander, I want to see resident in Brisbane. I want to see those kinds of world-leading institutions or organizations here so that my kids, if they choose to stay, "We'll have a job," the region continues to prosper.
Alister Fitzgerald (42:35):
And I think that technology is aggregating these areas of innovation across the world. I think as time goes on, it'll be increasingly difficult to be able to claim as your own a particular area of expertise. And so I'm particularly conscious of that. Again, we're trading off some potentially good, potentially bad things here. But it is a question mark I have over.
Alister Fitzgerald (43:01):
I do think a lot through that prism in a 5, 10, 20 year timeframe for Brisbane and what are those exciting, innovative endeavors that are going to continue to bring jobs to the region? I hope this isn't a factor that impacts on that. Sorry, I'm getting a bit sidetracked here. It's just an area I find quite interesting. I suppose the last area I'd like to touch on, so your legal background is perhaps an interesting layer on this discussion.
Alister Fitzgerald (43:35):
Where does the role of government regulation come in here over the next 5, 10 years as we're dealing with these changes? We're speaking very casually about repurposing real estate for different uses. A planning layer that regulates that kind of thing. So that sounds to me like an area that's going to be a hot topic or looked at. We've spoken about transport, infrastructure, those kinds of things. What are your thoughts on regulatory change and government involvement in helping this transition that we think we're about to go through?
Andrea Blake (44:19):
Well, I guess, there are lots of issues that the government is dealing with it at the moment. I mean, the COVID situation has obviously been highlighted. But climate change is still a really significant issue and how urban settlements and the built environment respond to climate change. We also have this overarching geo-political tension happening at the moment.
Andrea Blake (44:44):
So I think national security is becoming more of an issue as is personal safety and information security. So there's a lot going on that impacts governance of the built environment. To some extent, I don't really envy political leaders at the moment because they have a lot to contend with. But I think planning regulation will obviously be very important in dealing with a lot of those issues in the built environment, how it's formed and where it's formed,
Alister Fitzgerald (45:18):
Maybe an area for people in your profession to be leading the way with some quality thinking about how that might roll out. Because all those points you mentioned, which are all critically important to how the world will travel over the next little while, it's almost like another critical line on the things that need to be considered in a period of fairly fundamental change.
Alister Fitzgerald (45:48):
So you talk about the issues of climate change and the built environment is a critical component. That needs to be thought about if we're undergoing a change in how we interact with the city at the community level. It's almost like it's a bigger and better opportunity to be addressing all of these things because that is another reason to be making those changes and starting afresh. Do you think they might add up to be a sum benefit rather than weighing each other down?
Andrea Blake (46:23):
Well, to be honest, I just hope that they're actually addressed. I mean, it's not easy to address COVID, but it's right in front of us. But the issue about climate change has been with us for a long time and there's been very little action on it. So I would hope that as part of the governance structure that we would be looking at responding to all of these issues and trying to deal with them.
Alister Fitzgerald (46:51):
I suppose my optimistic view of that is that even though climate change is something that is an immediate concern and an immediate threat, it's often perceived not to be because the impacts of it can feel a long way away, even though we're seeing examples every day of how things are changing.
Alister Fitzgerald (47:11):
But if change is happening at the point through other things that we're talking about and how the city might be repurposed, that might be the impetus where you actually got things moving around and happening, where you can start to layer in more change in other areas that otherwise might've been procrastinated over to an extent that we weren't wanting.
Andrea Blake (47:33):
That's true. It's a really good time to innovate, when we have all of this happening.
Alister Fitzgerald (47:39):
I did say that was the last thing, but the last thing I did want to speak about, and you'd mentioned this earlier, so I'll let you lead this discussion. I'm not going to take it to a place you don't want it to go. But higher education is another sector that is undergoing some significant change at the moment.
Alister Fitzgerald (47:55):
Again, you can see the change that's happening now will probably be long lasting. Can you give us some insights into what you're seeing and perhaps... I mean, from a real estate point of view, I'm interested to understand how the significant physical footprints will change. But please feel free to talk more broadly about education itself, because it's one of the areas that has been significantly affected.
Andrea Blake (48:22):
Definitely. The higher education sector has really been affected by COVID; changes to the funding structure and also less certainty around attracting international students. So I must stress here, these views are my own, not the views of the university. But the challenge has been, too, with engaging our domestic students because we moved so rapidly to an online environment, and I don't think that they were particularly prepared for that.
Andrea Blake (48:51):
But I think some of the changes will be really positive. I think the university sector has proven or demonstrated just how agile it is and being able to move, within a week, from being face-to-face to an online platform. So I think that's been very positive. And I think the staff have shed a lot of resilience there. But into the future, I think the challenge is going to be incorporating the online environment, but also providing meaningful face-to-face experiences for our students in the community.
Andrea Blake (49:26):
I mean, you mentioned before the significant infrastructure that QUT has, which it's certainly a beautiful campus, both campuses. And I still see that even in a more online environment, we will still be utilizing the campus, I think, maybe in different ways, but I think those networking and opportunities to connect in a face-to-face environment are really appreciated by students and alumni and the community generally. But it is going to change. It will be different.
Alister Fitzgerald (49:58):
Yeah, I can imagine. I mean, as someone who has a vested interest in lower levels of education and how they've managed or not managed with the current environment, I'm very hopeful of some more innovative outcomes that lead to overall better educational outcomes at all levels than what we had before.
Alister Fitzgerald (50:22):
Because it seems there is the opportunity to be able to leverage knowledge and learning in a far better way with technology, but keeping that balance of the physical element that I think everyone that has been lucky enough to go through tertiary learning would probably say that that's a pretty critical part of the whole experience and what they get from it.
Andrea Blake (50:44):
Alister Fitzgerald (50:46):
Andrea, I have one question I ask at the end to all of my guests. I ask, what is your current obsession? And it's just a personal insight that you may be willing to share, something outside of work, outside of sort of family and personal endeavors that you do that might surprise people. Maybe there's a new... Or perhaps not at the moment. Maybe there's a Netflix show that you're binge-ing. Maybe there's a language you're learning. Maybe you sort of play the drums and no one knows about it. What can you share?
Andrea Blake (51:19):
Well, I'm certainly not going to reveal what I'm watching on Netflix. We did lock down properly. So we got a puppy. We already had a dog. We have now another puppy. She's a Kelpie-Border Collie cross. So she's completely insane. So there's been a lot of management of her and a lot of exercise. The other thing that I've been obsessive about is my urban garden. I've started growing food and growing my own vegetables.
Alister Fitzgerald (51:47):
Nice. Is that something new for COVID or you were sort of dabbling with it before and now you're ramping up?
Andrea Blake (51:53):
No, it's new. I could say it's COVID, but I actually think it might be sibling rivalry, because I went to see my brother and he has quite a successful urban garden. So I took the challenge on and now I do as well, which has been really rewarding. So I spent a lot of time in my garden. I would like to see the integration of opportunities for people to grow their own food within other contexts. I'm really lucky to have quite a big backyard. But if you live in an apartment, you might not have the same opportunity. So I think there's a real opportunity to establish community gardens.
Alister Fitzgerald (52:32):
I mean, the ideas we were throwing around before about repurposing of space, that's one I didn't mention. But there's a strong impetus in our family to that kind of thing as well. And I'm fascinated by, although perhaps it's a little bit nerdy compared to that sort of thing that you're talking about. But these sort of high tech, indoor, sort of remote managed farms, at high density and all optimized and these sorts of things.
Alister Fitzgerald (53:05):
And it does paint sort of a different picture about food production and distribution, which I know so little about that I'll just stop there. But I do find that a fascinating area. But my 11-year-old will match up against you with the garden. He's building our home garden at the moment. And I think if we leave him unrestrained, he'll fill up the whole backyard before we know it, which I think is probably not a bad thing.
Alister Fitzgerald (53:33):
And I will tell you, the TV show that we've loved over COVID. It's not a new one. And I was devastated to get the end of season three and realize I'm waiting another year is The Marvelous Mrs. Maisel, which is actually on Amazon Prime. I don't know if you've seen that, but that is outstanding, in my view, and my wife's also. So that's something to look out for if you're in the market.
Andrea Blake (53:58):
No. I like the recommendations. Thank you.
Alister Fitzgerald (54:01):
Great. Andrea, I've really enjoyed the conversation. Thanks so much for your time.
Andrea Blake (54:04):