The real estate industry in India and beyond is no exception. 2018 has been a year of remarkable policies for the Indian real estate market. Through dedicated initiatives like RERA, REITs, Ease of Doing Business and Housing for All the industry has witnessed the much-needed transparency across the realty value chain, enabling a rippling effect on capital inflows. The growth in 2019 will be augmented by one unifying factor and that will be technology and the subsequent adaptation in the sector.
Across the board, conversations about property technology (PropTech) are becoming more frequent. With a rise of innovation, data democratization and our growing understanding of how technology can enable new opportunities, improve business performance and enhance the end-user experience, PropTech has been gaining traction in recent years as one of the biggest trends in Real Estate. And while companies and governments are still navigating the enormous wave of digitisation and technology, some concrete developments have emerged.
The race to leverage data will intensify:
With the internet of things (IoT) and plethora of data available, the real estate industry will continue to race to leverage data. It will need to understand data at a deeper level to deliver products that drive benefit to the customers. One of the most visible ways it will achieve this is through harnessing data more strategically to improve & personalise the user experience of the built space.
Proptech-influenced possibilities for office workers and occupiers have been popularized in recent months. More sophisticated work places allow users to reserve desks at work, automatically adjusting the lighting or temperature to individual preferences, or even having your favourite beverage ordered ahead of time from your preferred café and ready for consumption at the right temperature as you arrive at your desk - all through an app. Truly disruptive in anyone’s language.
However, the reach and possibilities for leveraging this data extends further, especially in the area of facilities management. Using the data gathered from meeting room bookings, office usage patterns emerge, enabling facilities management operators to maximise the efficiencies of space; they will be able to map out peak periods of space usage, and shut down power and water supply when they are not in use, or place unused zones in a low-power mode to maximise energy savings. Or they may dynamically make this space available to other enterprises to use in real time.
With increased automation, facilities management service providers will be able to consolidate network operations to manage a portfolio of buildings remotely at a lower-cost location, relying on automated sensors, supervised by a lean pool of highly skilled facility managers. We are starting to see green shoots in this space with the government investing in smart building technology. Automation of building management can lead to the creation of network operation centres – or virtual facilities management centres, to remotely manage buildings. This means that a single facility manager can manage a portfolio of buildings from a virtual centre, instead of relying on many lower skilled workers.
If data is synchronized at a more sophisticated and deeper level, it is not impossible to imagine a scenario when landlords can sublet or ‘rent’ out under-utilised space to co-working space owners, or the possibility of other real estate firms to offer co-working spaces and the suite of customer services that come with these offerings.
Automation of smaller deal sizes:
The advancements in fintech will logically progress to real estate. Real estate is one of the largest asset class globally and presents a natural progression development from fintech to PropTech.
Utilizing FinTech, we can create new deal origination platforms to match retail investors with developers or institutional property funds. Fintech makes possible the creation of algorithms that act like a dating app, automating the match between investors and the available assets, particularly those that are priced in the smaller sub million-dollar market.
It is the view of the real estate industry that Proptech is work in progress but there are many exciting green shoots and a growing industry & governmental focus on Proptech. In the short-term progress will be limited by access to top talent and those who have the ability to reimagine a digital real estate world. The second challenge will lie in how we can effectively capture and harness data; sorting the wheat from the chaff, so we can intelligently leverage data to drive truly amazing outcomes. As with any transformation, it is a journey and the aforementioned challenges are par for the course of any transformational journey, not just limited to real estate.