5.10.20

The Propcast: Sustainability Challenges and PropTech Solutions of 21st Century Real Estate

In this episode the Propcast speaks to Mikkel Bülow-Lehnsby from NREP about the sustainability challenges and PropTech resolutions of 21st Century Real Estate.

Click here to listen to Episode 8

 

The Propcast by Louisa Dickins, Co-Founder of LMRE the leading Global PropTech recruiter brought to you in partnership with UK PropTech Association. The UK PropTech Association is a membership organisation to drive the digital transformation of the property industry. This show will focus on connecting the PropTechs, real estate funds and VC’s globally…and get everyone talking about innovation of the built environment.

5.10.20

About Our Host

Louisa Dickins

https://www.linkedin.com/in/louisa-dickins-ab065392/?originalSubdomain=uk

Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).

About LMRE

LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the right place at the right time. They are passionate about the industry and passionate about people's careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.

 

About Our Guest

Mikkel Bülow-Lehnsby

https://www.linkedin.com/in/mikkel-bulow-lehnsby-63365/?originalSubdomain=dk

Mikkel is the Chairman and Co-founder of NREP, a leading Northern European real estate investment house driven by a mission of making real estate better. The NREP approach and mission has lead NREP to not only be one of world’s most consistently outperforming managers, but also a founder and developer of several leading Nordic real estate platforms, such as Pelican, Logicentres, UMEUS, Plus Husene as well as an important counterparty for municipalities on large scale city development projects and cutting-edge sustainability innovations such as UN 17 Village and Upcycle Studios some of the world’s first “upcycled” development projects.

 

Resources

LMRE website www.lmre.co.uk

UKPA www.ukpa.com

NREP website www.nrep.com

 

Insights from this Episode

 

  • Personally, I think that finding ways to fundamentally make existing stock more sustainable is something that's super interestingMikkel Bülow-Lehnsby
  • We realised that technology clearly holds a lot of potential for enabling the making of a real estate betterMikkel Bülow-Lehnsby
  • Wouldn't it be nice if one could build an organisation where people come, and then they really feel free. And they really feel like they are allowed to express themselves as you are? Mikkel Bülow-Lehnsby
  • How you build cities really defines how we get to interact as humansMikkel Bülow-Lehnsby
  • We realised what we really cared most about using those years to do, was to fundamentally try to make better products and try to nudge the industry in a direction that we subjectively felt was a good oneMikkel Bülow-Lehnsby
  • We are just the results of our habits. So the biggest obstacle to changing something in the world is that you need to change people's habitsMikkel Bülow-Lehnsby

Episode Transcript

Louisa

Hi everyone, and welcome to The Propcast. My name is Louisa Dickins, co-founder of LMRE, and board director for the UKPA, and I shall be your weekly host. Each week for 30 minutes, we'll be connecting VCs, PropTech start-ups and real estate professionals globally and assist in bridging that famous communication gap we all love talking about. So, sit back, relax and enjoy the show.

 

Hi, everyone, and welcome back to the Propcast. On today's show, we will be speaking with NREP co-founder and partner, Mikkel Bülow-Lehnsby on sustainable challenges and PropTech resolutions of the 21st century in real estate. So welcome Mikkel.

 

Mikkel

Thank you, Lu. Thanks for inviting me.

 

Louisa

My pleasure. For those who don't know Mikkel and NREP, I'll give you a brief introduction. So Mikkel is co-founding partner in NREP to the leading Northern European real estate investment house and NREP is a vertically integrated real estate product innovator, developer, investor and operator driven by mission in making real estate better. Now, the NREP approach and mission has led NREP to not only be one of the world's best consistently outperforming managers, but also a founder and developer of several leading Nordic real estate platforms such as Pelican, Logicenters, as well as important counterparty for cities and large scale city development projects, and cutting edge sustainability innovation such as UN 17 village and Upcycle studios, which we'll hear more about later. Now, prior to co-founding NREP, Mikkel founded various start-ups himself from all across the board in the world, and in cities like Boston and Santiago, and anything from a pizza restaurant franchise to an event management company, and a painting company. So he's not just focused on sustainability and real estate by any means. And Mikkel is living in the beautiful city of Copenhagen and holds an impressive MBA from Harvard, so Mikkel I hope that's a sufficient summary! Anything else you’d like to add to that?

 

Mikkel

Very flattering, thanks.

 

Louisa

Warm welcome to Mikkel. And let's start the show by hearing a bit more about NREP, and then also tell us a little bit more about how 2150 comes into it as well.

 

Mikkel

Sure. I mean, as you as you put it then, I have an entrepreneurial background. So always from a young age enjoyed trying to make things happen, and had absolutely no red thread in what I was doing. Apart from seeing some problems and thinking that I could play a part in trying to solve them. Although those problems changed a lot over the years, my first business in eighth grade was an event management business, I think probably we'll just call it throwing parties back then! And then I did all kinds of things for a pizza franchise chain to a painting company, to a FinTech company in a FinTech start-up in London. But I had a worried father, who thought all this entrepreneurship seemed very risky. I am very happy with him now that he persuaded me to do a little bit of the more traditional corporate track as well! So I did my studies, I spent some time at Goldman Sachs doing investment banking, worked in a large media conglomerate doing their corporate strategy and M&A. So I always had a little bit of a dual track, I would say. And then now almost 15 years ago, I had returned to Denmark after roughly 10 years abroad, and got the idea of starting a real estate investment management company here in the Nordics. And really, it was based on two main observations.

 

So the first one was that I have been toying a bit around with the idea of creating an index fund here in the Nordics, because there were no index funds back then. And I believe that for most investors who do not have an inch, then then index investing is basically the sensible thing to do. And can given an offering was not up here I thought that would be interesting. But through my work with that, I discovered that real estate globally had a fairly low allocation in the asset class. So it was only around 4% back then, and if you believed in portfolio theory which I thought was gaining traction among these investors, then you should be more like 10 to 20%. So I thought it was likely there's going to be a growing demand for real estate as an investment service you could say. Then when looking at the Nordics, no-one was really offering that. Real estate in the Nordics back then as an industry that was not taken seriously, so I think if you were at a cocktail party and you said you worked in real estate, you would definitely rank below the car salesman. And the industry was really populated, and this is grossly generalising but by lazy coupon clippers and wheeler dealers, you could say, flipping assets. And being an entrepreneur, I had actually personally bought and renovated a few apartments for personal use. And I think the entrepreneurial piece of me thought it was odd, why there was not more of a product focus on the real estate, so why there was only people fundamentally like flipping assets and or being coupon clippers and very little focus on how do you actually make these assets more valuable for their users. And the combination of those two things make me think that maybe it could be interesting to try to build a real estate investment management company in the Nordics.

 

And I was lucky to find some people who actually knew something about it, because I never done anything about buying an apartment own use. And then we set out to do that and we're very fortunate to do that to be honest. In my mind that the bar was fairly low, so it didn't take that much to actually find ways of creating more value beyond just trying to buy cheap and sell dear, which obviously has to be the part of the strategy for any investor.

 

But what we really did is we did three things. So we identified segments with structural tailwind. So, when I looked at the real estate industry back then people raised money, and then they went out to find a good deal. And what we believed in, which is more classic entrepreneurship, is to find somewhere where there's a supply demand imbalance. So there's something happening, of course, logistics, which was the first sector we went into, where we said, okay, within logistics there's a very clear demand driver, and there's no supply, and there's really nobody who's positioned themselves to be a real estate service provider to the logistics industry. So I find the segment with tailwind, then obviously, try to find value. So find the greenest apples and having the luxury of only focusing on one thing, and then apply this customer centric product approach to finding out how do we make this more valuable for the for the tenants, for the customers that I that I always called them to much confusion of everybody was working with.

 

So that's, that's kind of what our philosophy. And then secondly, I've always had a desire to build a company organisationally, where you really attracted people with an entrepreneurial spirit, and you try to create an infrastructure for them where they could be allowed to run, you could say, because my own personal experiences from working in corporates, was always the experience of feeling limited. And I thought, wouldn't it be nice if one could build an organization where people come, and then they really feel free. And they really feel like they are allowed to express themselves as you are? And I think that's been an another quite important piece of the puzzle of having made in my work, because in the end, you need an idea and there needs to be a market opportunity. But then obviously, it needs to be well executed. And that in the end is all about people and motivations.

 

Louisa

Ys, it's quite difficult to create that culture, especially if you're promoting that philosophy with your investments, and then creating that environment that you actually work and live it. And how would 2150 slot into that then?

 

Mikkel

Yeah, so then after roughly 10 years, we felt we had delivered on our first vision of becoming the best real estate fund manager in the Nordics. Now, that's obviously for others to judge. But we ourselves felt like, okay, we've ticked that box, and having delivered very strong returns to our investors. And we therefore almost spent a year in our partner group, discussing and deliberating a bit on what's next to us, because it's not particularly motivating to say in five years, we're still going to be the best in the Nordics. And I think back then, quite naturally probably, the way most private equity companies grow is that they fundamentally earn the investors trust you could say, by delivering good returns, and then they find other things that they can sell to these hard earned relationships, and thereby they expand their business. We realised that what excites us the most in the partner group and what we're most proud of, was all of those projects where we had truly made better products. So I think we realised that all of us, we are still fairly young, and thought we had a lot more good years left in us, and we realised what we really cared most about using those years to do, was to fundamentally try to make better products and try to nudge the industry in a direction that we subjectively felt was a good one.

 

And at the same time, we became more and more aware that this industry we're in, which was considered the world's largest asset class, was really the world's largest product category. And arguably, a socially incredibly relevant product category, because we spend 90% of our time in it, because it consumes anywhere from 40 to 60% of the world's resources, depending on what you include and exclude. And because how you build cities really define how we get to interact as humans. And despite that, and then there's industry seem to be living, it's complete, isolated, little world, parallel universe almost. It was an industry, which was drastically not customer centric. It was an industry, which was very non sustainable. And it was an industry, which was very inefficient. I mean, I can't think of I think any other industry where the cost of producing goods has doubled over the last 30/40 years, depending on what country you're in all other industries, they know that they have to find a way to reduce the cost of their goods in every year to stay competitive. In our industry it's gone the other way, which again is odd.

 

So what I realised really as an entrepreneur, was that what I originally thought was an idea to build this business, and then we'll sell it and make some money, and then do something even more interesting, I actually realized that, hey, I am just really lucky, I've randomly ended up in the world's largest industry and product class, where there's so many problems to solve. And they are just meaningful at the same time, how lucky can I be? And that's when I realised personally that I'm going to spend the rest of my life in this product class, trying to fundamentally make it more customer centric, more sustainable, and more efficient. And I mean, that's I think is a nice thing to be able to spend your life on. But I also think it's commercially abnormally attractive opportunity, so I'm not trying to say that we want to save the world, but we think that actually in improving the world, that is also how you build the best businesses.

 

Louisa

Exactly. And is where focusing on sustainable challenged, what would you say the biggest sustainable challenge facing real estate is for the 21st century?

 

Mikkel

I'm just realizing you asked how to 2150 fit into it. And then I started ranting on this, so let me just tie that in. So what we then decided on, was that we really want to move from the vision of being the best real estate manager in the Nordics, to a purpose of saying we want to make real estate better. And our vision is that we want to try to become the most innovative and the most competent investor in the real estate value chain. And that means everything we do in NREP in terms of investing in our organisation, it has to be driven by the idea that this will cause us to be more competent at making real estate better. And as part of doing that, we realised that technology clearly holds a lot of potential for enabling the making of a real estate better. And we also realise though, that we are not a technology savvy company, like most other real estate participants we're not on the forefront of the technology frontier. But we really wanted to try to find a way to use it, you could say, towards our purpose. And we started making a few investments for our balance sheet into technology companies that we ourselves used to cross our various business lines and portfolios.

 

And then we realised that that also was not focused enough. So what we saw though, was that we could see that by us having a lot of insight on the full real estate value chain, and really understanding the biggest pain points, then that helped us in identifying technologies that could help address some of these pain points. And then because we then were user of these technologies, we could actually help the entrepreneurs scaling their business quicker or getting access. And that led to the realisation that what we should really be doing is, we should become a facilitator. So we should be a real estate company that connects the incumbents in the urban environment with technology companies, and that is 2150.

 

Louisa

And could you talk us through one of your investments, and one of your success stories which you now use yourself as well as facilitate?

 

Mikkel

Yes, the thing that I'm most excited about right now is actually an investment that will be the first investment from the fund, which is an investment company called CarbonCure, it’s a Canadian company. And so the way we approach it in 2150 is very much at a problem driven. So one of the problems we identified is concrete. So, concrete is responsible for 8% of the world's CO2 emissions. And as we are building in New York, every month now, then obviously we need more and more concrete, so that needs to be solved. And obviously, there are lots of good attempts on introducing more wood and other alternative materials. But for the next whatever 10 years concrete is for sure going to be the biggest input in terms of building the urban stack. So, we need to find ways to make that more sustainable. And we've been over half a year mapping out what are all other technologies out there that are trying to address that problem. And I've also worked actually very closely with McKinsey around that, and identified numerous interesting technologies. But there was one company that really stood out in our minds, which was this company called CarbonCure. And the reason why they stood out is that they were really approaching the problem in saying the only way we're going to have impact quickly, is if we fundamentally help the existing value chain become better.

 

So most of technologies out there are trying to make a new competing technology to find new ways of creating concrete, and those are tremendously positive and I'm sure some of them will become very successful. But it's a very, very big task and it's a very long journey. Because the concrete industry is a low margin business and so it will take some time. So the guys, they fundamentally have found a way to use CO2 as one of the materials in the concrete making, and by doing that they will one obviously absorb a little bit of CO2, and two they basically can use less cement. And cement is the most heavy piece of concrete. So, thereby, they reduce the amount of CO2 in the concrete with roughly up to 10%. So, that's obviously not a lot, but it's an incremental improvement that you can add on to all other improvements. And importantly, it's a commercially attractive improvement, because the cement is the most expensive piece of concrete. So by eliminating some of the cement, this is actually cost saving exercise at the same time, which means that they've been able to get a lot of traction really quickly on a lot of concrete manufacturing plants in the US, and now we are helping them to try to enter the European market. So, yes that's a little bit top of mind.

 

Louisa

And if you're looking at an investment, is there a certain stage you look at or are you stage agnostic

 

Mikkel

Well, so the actual investment vehicle that we that we have, we'll be putting in the real capital typically at the A and B rounds. I think we also feel that where we want to take most risk is when you have a validated product, also because we want to be that facilitator. And for us to disturb, if you will, one of our large investors, then we also need to ensure that this product, there's a very high likelihood that this is something that they can really use. Because that's obviously one of the problems in our industry is that there's no routine of really changing a lot. One of the challenges for many of these new technologies is to get access and get in the door, and make the companies use your product, and that is what we really need to try to make easy. And that is a lot easier when you have a product that's working. So therefore for those reasons, we will primarily be putting in most of our most of the financial investments in B rounds.

 

Louisa

There's so many different areas of PropTech and resolutions, if you're looking at the development to the building of it, to the cement, to looking at reducing emissions waste, there's so many different parts to it. When did you actually personally see an increase in interest in the real estate world and the real estate industry? I mean, it's now on every funds and agendas, but when did we really see a surge in interest in it, and people taking it seriously? We've known about climate change for so long, but I really feel everyone's now like right, its time for us to do something about it, probably in the last five years. Would you agree with that, when did you see a change?

 

Mikkel

I mean, just personally, I was introduced to this architect here in Denmark, probably seven years ago now, who fundamentally was dedicating his life to trying to find a way to use waste as a building material. Because his logic was that we're running out of natural resources, essentially. And this is part of what's causing the problem, is that we are harvesting all these natural materials. And he said, the only raw material that we're getting more and more of is waste, so why not fundamentally try to use that as a building material, such that every time we build something, we actually eliminate a problem rather than creating a problem. And I was totally, I fell in love with that concept. Because in my mind again, business is about solving problems. And so what he was proposing was obviously to try to take the real estate industry, and make it into something that really also was part of the solution for our environmental problem.

 

So for me, that was I think one of the big epiphany moments of when we at NREP really started investing heavily in doing what a lot of people considered to be very odd back then. And I think for the real estate industry in general, I feel something that as you say, it's probably been really accelerating over the last five years. But I think particularly over the last two years, and I think I clearly see COVID as being an accelerator. And I think part of the reason for that is just that we have habits now, we are just the results of our habits. So the biggest obstacle to changing something in the world is that you need to change people's habits. And COVID, I think, is just a great opportunity for changing habits. Because everybody's life has been disrupted, and that means you're just way more open minded for doing things differently. And at least in the beginning of COVID, I was slightly worried that a financial slowdown would cause people to deprioritise sustainability, but I feel that I'm actually seeing the opposite, I feel that I'm seeing that the slowdown of society in general has just caused people to be more open minded to changing behaviour, and increasing the awareness of the challenge that we're facing as a planet.

 

Louisa

Do you think there needs to be a stronger education piece that needs to be put in schools maybe, or just in general whether it's in like the papers to try and enhance adoption, whether it’s the everyday man and women, to large businesses? What are your thoughts on that?

 

Mikkel

I personally, I think that the two biggest drivers for change is partly unfortunately, but I do think that governments need to lead the way with some regulatory I'm generally a fairly liberal, realistic person, but I certainly do think that you need to create the incentives. And I think that is part of what government can do and I think they are increasingly doing so. And I think the other real big potential driver of change would actually be if the end investors, the ones at the top of the food chain, if they fundamentally went out and were willing to lean out more on basically asking for investments that will put more premium on. I think that what’s really started to change is that I think, even just five years ago I think most investors saw it as a trade-off. So they were like, okay, you do sustainability, that's nice, but this is not very good for investment. So we kind of understand you it, but we're not that fond of it. And I think there's really starting to be this shift that I think more people are realizing that okay, this is good business. So, if we get the majority of investors to obviously realise that, then I think you're going to start seeing much faster change.

 

Louisa

And if we're looking at other parts of this real estate sustainability PropTech area, we're all talking about creating the smart cities, and that's obviously sustainable cities, you at NREP play an important counterpart for large scale city development products such as UN17 Village and Upcycle Studios, could you tell us a little bit more about that and what your involvement is? And how these are sustainable innovations?

 

Mikkel

So I think what we realised was that that one of the big areas of opportunity for trying to make real estate better, was really in creating new cities or new parts of the city, and that the design process for that today does not really lead to the creation of good product. And let me try to explain why that is. So I think most of the urban developments you see are in Western Europe, then you have typically the city which sits with some land, they need to basically create more space for people coming into the cities, and then they go out and they make a master plan for this new part of town. And that's obviously, the right place to start, you get an architect and you ask them to come up with fundamentally, what is going to be hopefully your product. And that needs to be seen holistically because for a town to work you need to have the kindergarten there, and it's not very profitable to make a kindergarten but somebody needs to make it, because it benefits the whole. You might want to have some hipster cafes that might not be nearly as profitable as Starbucks, but they will attract a different type of audience and create a different type of vibe. The point being that they make a master plan, but then they go out and sell the master plan in small pieces to individual developers. Now, each developer competes to get that piece of land. And once they've gotten it, the first thing they do is they try to change the zoning, such that they can build something even more valuable.

 

And they obviously have no incentives to consider the whole, they only have an incentive to optimize for that small stamp that they have. And in reality, what they typically do is they do not really develop to the users of the town, they develop to a pension fund or some sort of an investor at least, because they will be the acquirer of whatever they build. And therefore almost by design, you're very likely to get an area or town where there's not much put into thinking about sustainability angles, there's not much put into really thinking holistically about making this 20-year product. So that was one of the I think realisations we got and we started talking about, what if we went in rather as joint venture partner, so you stay in as well and we are thereby fully aligned around the whole of the product that we're going to be creating. And then we take a little bit longer time on this, and then we try to build something together where we really think realistically about putting in the kindergarten in this corner. Our first urban development is something called North harbour and for example there we've created this swimming area with a sauna and with showers and stuff like that, which that's obviously not a good investment if you only do that, but it obviously adds something to the whole area, which makes the whole area richer and better. So those are one of the things that that that we've been that we believe a lot in and when we invest in a lot of resources and trying to see how can we make it how can make it better.

 

We also involved in a socially stigmatised area, where we again work together with municipality have done a joint venture to fundamentally try to improve that area. And we realized there was in that area, there was only one type of living situation. So you could either rent a 40 square meter apartment, or you could rent a 55 square meter apartment and that was it. And there's lots of it, but those are the only two types of units and the only way you could live there. And again, obviously if you have a completely uniform offering, you're very likely to get a pretty uniform citizen. And so in that project we are working on fundamentally changing the combination of what's in there, and we have a strong belief that is going to be something that's going to make that a much better holistic experience. And which again, I think goes hand in hand with making it a better social offering but also makes it a better investment. So I think we've spent a lot of time actually, over the last few years, getting investors on board with the fact that, hey, this is not a trade-off. You truly can create win wins by doing this.

 

Louisa

And, personally or for NREP, are there any sustainable technologies or PropTech solutions you think are missing out there? I mean, definitely lots of businesses popping up now, lots of them are doing something which is more all-inclusive, some of them are solving one problem in real estate, is there something you think might be missing, or that you're particularly looking for? You mentioned concrete, that's going to be high yielding and of interest but anything you're looking for?

 

Mikkel

Well, I mean, that yes so we've identified lots of different problems that we would love to try to solve with technology. And I think one modularity in my mind is clearly one of the solutions for both sustainability and for productivity. So that's something we are investing a lot into. We're investing a lot into the whole retrofitting, because one of my worries I have with all the BREEAM and LEED and all that when it came out, was do you risk but that just leads to obsolescence. Because from a sustainability perspective, clearly the absolute worst thing you can do is to tear down a building and build something again, if you look at a life cycle analysis of a building, and if you assume that it will only live for 15 years, just for sake of argument, then essentially, the CO2 footprint half of that over 50% comes from the construction. So I was always very worried that that all these certifications, were going to lead to people starting to have to tear down all the obsolete buildings, because they don't live up to LEED and BREEAM. I think these are great from the perspective of trying to create steering on how do you actually make new buildings more sustainable. But it would be very sad if that lead to everything else having to be torn down, because then it's not very sustainable. So, personally, I think that finding ways to fundamentally make existing stock more sustainable is something that's super interesting.

 

I think in particular when you look at all the systems inside a building which today are generally analogue in most all buildings, finding ways to optimise those systems I think is exciting. And then back to the point about the footprint, I think probably one of the more difficult ones, but one that I really am still excited about is this idea of using waste as a building material. I think we've built I think that the first in the world, we built here in Denmark two large projects where 80% off of the building materials was basically waste that we transformed into building materials. But the challenge with that is just that the supply chains are obviously not there. So to make that commercial there's a long road, and so that's personally one of the areas that I would really like to be part of solving. But I also recognise it's complicated, because the existing building materials supply chains have been optimised for the last whatever 150 years. And obviously when you start using waste as a building material, there's lots of challenges to deal with. Also, because of safety, I mean when you build something you need to make sure it works, so there's lots of problems and you don't really have the supply chains that that will feed you with these materials, and therefore it becomes a bit more expensive to do this. And I think in the end, the way you're going to make sustainability work is it needs to also be commercially sustainable.

 

Louisa

And another part of NREP, you have your living side of it, tell me if I'm pronouncing this wrong, you’ve got UMEUS?

 

Mikkel

Yes, it stands for you, meet, us.

 

Louisa

Okay, so tell us a little bit more about that because obviously there's a massive growth into micro housing, whether that is making space more efficient and obviously making it sustainable living, how can we create this massive housing shortage problem and across the world. Tell us a little bit more about the housing part of your business.

 

Mikkel

So this was a direct consequence of our new vision. So we said we want to make real estate better, so let's really start understanding the customers. So five years ago we went out and we interviewed about 40,000 customers on the living side. So we said, okay, living is one of the categories where we think there's room to make things better. And we basically went in and then we just went to various demographic groups, and we try to understand how can we fundamentally service you the best way, with a living product, and I think here again in the Nordics, we've been a little behind if you look at the US, you have for much longer have the concept of various types of living as a service. But that's what this led us to. So we identified various groups, so we have a student housing platform called UMEUS, we have a young professionals platform called Noli, we have actually maybe an interesting one so after having worked also with anthropologists of these different demographic groups, we identified two groups that we actually found there was a nice synergy between. These were what many people call the empty nesters or active adults I think it's a probably more positive connotation. So the people were the kids have moved from home, and they might be looking into slowly exiting the working market. And what we realised with these people is that they generally, and within Eastern demography you have obviously different people, so these are gross generalisations.

 

But what we realised is that they generally were quite interested in moving a little bit out of the city again, so being a bit closer to green areas. They were very adamant that they did not want to live together with only other people in their age, because they've one thing that was absolutely adamant was they did not want to be seen or labelled as active adults, so did not want to be only together with older people. And then they were generally worried about being socially isolated, and what we realized was there was another demographic which was families with kids below ten. So they generally really cared about safety, they actually liked the idea of having a garden. So again, being a little bit outside of the city would be really nice. And they desperately needed more hands, they needed somebody who just looked after the little one when one was sick and they had to go to work, or somebody that could potentially cook and we realised there was a kind of a neat logistic opportunity between these two demographic groups, and have created the concept called the Plus houses where we create communities where you have one cluster of ten small houses, and another cluster of ten small houses, and one cluster is for the families with kids, and one is for the active adults. And on the active adults, you have vegetable gardens, stuff like that, and around the kids you have playgrounds. And in the middle, you have these really nice communal areas, where we then have a host, and the only job of the host is actually to cause all the citizens of this little society to build all these clubs. So there'll be a Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday eating club would, and then as a family, you will choose to be part of that two days a week, for example, and the other days you cook for yourself. Or you will have a nanny club, so for some of the adults who would love to look after kids once in a while, stuff like that. So that’s an example, and then that way you create content from the citizens themselves, which again we feel is a way of making real estate better.

 

Louisa

It's crazy to see the way this general living thing has changed, especially over the past five years, this whole concept of alternative living. It's something that personally I would never have thought of when I first left university, I always thought I had one option, it was to go to the city, move in on your own and make your own way. But there's so many other solutions now which is great. It makes it so much more enjoyable. I think people forget how lonely you can be even though you’re in a  massive city surrounded by people, but how lonely going to work and all the stuff you have to get through by yourself, but these different solutions are brilliant.

 

Mikkel

What’s crazy if I can just add, is that again I think in Denmark at least, whether you were a student, whether you were a professional, or whether you were like a family with kids, in reality there's only been two generic options for living. Which is basically either you rent an apartment, or you buy an apartment. And, again if you use the product analogy, I do not know of any other product category where people do not spend more time on segmenting their customers, branding their products, figuring out how else can I service these customers of mine? So in my mind, it's quite baffling actually that we've been so behind.

 

Louisa

Well, it'll be interesting to see what the next ten plus years hold for us. And on that topic, for NREP and for you, what would success look like if we're looking ahead to ten years?

 

Mikkel

Successful will be that we have very measurably been part of both making the urban product more sustainable, and actually also more socially inclusive. I think these are the things that we believe are at the top of the agenda in our minds. How do we fundamentally make the urban stack more efficient, more customer centric, and more stable? And we want to see measurable results.

 

Louisa

Well, it sounds like you're on track so far just hearing from you today. And unfortunately, we're coming to the end of the podcast, but before we go is there any bit of parting information you’d like to share with our audience and the best way to connect with NREP as well?

 

Mikkel

Thanks again, for having me, really happy that you hold these events because I think in the end, as we also discussed, it's all about to the spreading knowledge. It's such a big industry now, so there's no way we can do this on our own. It requires all of us to work together. So actually mostly just thanking you for giving me the opportunity to share, and we obviously always looking for passionate, motivated people who share our beliefs that the business is about solving problems, and who are excited about the urban stack. So if there are listeners like that, then yes shoot us a mail.

 

Louisa

And what's the website details?

 

Mikkel

www.nrep.com so clearly not a really well chosen name! It shows the lagging product-centric origins also of ourselves!

 

Louisa

Don't worry about it, we're still learning, I think we've changed our website so many times from .com to .co.uk! Okay, well look Mikkel absolute pleasure having you on the Propcast, and I'm looking forward to catching up with you.

 

Mikkel

A pleasure meeting you Lu and have a lovely day.

 

Louisa

Thank you for joining us this week on the Propcast and a big thanks to our special guests. Make sure you visit our website www.lmre.co.uk where you can subscribe to our show, or you'll find us on iTunes and Spotify where all good content is found. While you're at it, if you found value in the show, we'd appreciate people rate and review us on iTunes. Or if you simply spread the word. Be sure to tune in next Tuesday, and I'll catch you later.

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