A quiet revolution is on its way in Real Estate: What is Space-as-a-Service?

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Subscription Case #11

By Niels Vestergaard

At Subscrybe, we’re always looking out for the next big development in the subscription movement and recently, I stumbled upon a phenomenon that will undoubtedly have a big impact on consumers as well as companies in the future.

‘Space-as-a-Service’ or ‘Real-Estate-as-a-Service’ is on its way in the real estate business and this is not just another buzzword, but a true redefinition of the way we use and consume space, offices and homes. Rising demands for climate reporting, air quality, saving energy and intelligent utilization of space has created a whole industry of new, innovative companies working to create the future solutions to the aforementioned challenges.

A new way to consume furniture

Here at Subscrybe, I believe the best example we know is Danish Nornorm who created a furniture concept for office spaces where companies pay a subscription for flexible decoration of their office and workstations. But why should you subscribe to furniture that you can just as easily buy, you might ask? Because flexible work life and increased turnover results in a reality where companies struggle to predict the need for work stations in the future.

At Nornorm, you get professional interior decoration of your office space and pay just €3 Euros per square meter, including a start-up fee of €18 Euros per square meter. This means, if your team is reduced (or increased), then the subscription price is flexibly adjusted and Nornorm takes the furniture that you no longer need, back to them. This is a whole new way to understand space and it is this very thought that is prevalent in the new Space-as-a-Service universe. And it seems that the real estate business is welcoming this development. Earlier this year, Nornorm landed a mega-investment of €110 millioner Euros for growing the concept that is already operating in many of the largest cities in Europe.

Technological innovation on steroids

But Space-as-a-Service doesn’t stop here. Countless start-ups are working to meet the coming challenges in the real estate business. Climate reporting, energy conservation and improved air quality is on the wishlist from real estate providers and the market is booming with Software-as-a-Service companies, born to meet the challenges and service both owners and renters much better. The one we know best here at Subscrybe is the IoT device Saveeye that you connect to your electrical relay and makes it possible to monitor your electrical use in realtime. But the same is possible for landlords who will be able to monitor the air quality in their buildings, store electricity in the walls of the building and take care of their climate reporting with the snap of their fingers with an intuitive CRM-like system.

At Hococo they work with a customer-centric communication system for renters, at IoT Cleaning they are able to clean rooms based on how much they are used and at Aeroguest they’ve developed a system that makes a hotel visit a whole new experience. And it’s not just for landlords that this new business area is relevant. It’s going to revolutionize the way we consume and maintain properties.

Why is this relevant for the subscription movement?

The next question then becomes – what does all this have to do with subscription? Well, like I said, the vast majority of these new companies are Software-as-a-Service based and, like Nornorm, they operate with a subscription model. This is not just because the subscription model offers recurring revenue, but simply because this business model is tailored for the flexible future of the real estate business. In Denmark alone, there’s more than 50 different start-ups who work with the development of technology that will revolutionize the way we rent, sell and share with each other in the future. The subscription model is ready to help these start-ups with growing and securing real estate companies, consumers and companies with a flexible and manageable way to monitor consumption – and save money.

Udviklingen af Space-as-a-Service bliver spændende at følge i de næste par år og vi vil med garanti opdage nogle fantastiske væksthistorier for nogle af disse nye selskaber.

The development of Space-as-a-Service will be exciting to follow for the next few years and we will definitely see some amazing growth stories for some of these new companies.

Read more insights on the subscription movement here