Future of real estate technology trends
Valued at $228 trillion, Global real estate is the largest asset value in the world. it’s no surprise that we’ve seen significant investment in proptech, a staggering $10billion the US in 2019, and no sign of it slowing down. The surge of investment in property technology will have a knock-on effect on the future of real estate technology trends.
Future of building technology
We can’t discuss ‘building technology’ without mentioning smart buildings. A mere buzz word ten years ago, but today, smart buildings are the new norm. Before we discuss future real estate tech trends, let’s first get to grips with smart building trends that will come to define the topic of discussion in hand.
What defines a smart building today?
A smart building is connected by technology, sharing information across systems in order to optimise performance.
Sensors are dotted around the building so that information can be collected and shared in real-time which is then shared via a communication network, with intelligent software. This is often referred to as the Internet of things (IoT). The types of sensors you’ll typically find are; occupancy monitoring, temperature monitoring, energy monitoring and building monitoring.
A smart building in the commercial real estate world goes far behind what is currently available for consumers at a residential level. Tenants or homeowners can now control many aspects of their home through their smartphones such as heating, lighting and security. However, on a commercial level, smart buildings have the capability to trigger actions based on data, and optimise accordingly, without human interaction.
A smart building today goes beyond even that. In the past, in an effort to adopt technology thinking it’s the answer to everything, buildings have been kitted out with tech unthoughtfully. In their haste, building owners failed to understand how tech could be used to provide a more seamless experience for their tenants or to streamline operations. Whenever we implement a new technology the question we need to ask ourselves is if the technology provides any value to the end-user. Whether it’s to make our lives easier, more efficient, save us money or even to entertain us, a building is truly intelligent if it’s user-led.
New real estate technology
Green buildings
It should come as no surprise that trends in future real estate are dominated by green initiatives. 2019 was dubbed the year the world woke up to climate change – and it’s no surprise with the increase of natural disasters and record-breaking heat the world endured. With the built environment responsible for a huge chunk of global emissions, and tenants more eco-minded, buildings that can prove they are sustainable could have a better chance of attracting tenants and realise significant cost savings in reduced energy consumption.
There is a notable investment opportunity in green buildings. A report discussing M&G Real Estate showed that the company’s green assets achieved a higher rental income (+53bps). The investment opportunity alongside the growing climate change concerns bears no surprise that the green building sector is set to double in 2020.
Wellbeing and community
The flexible workspace market has grown significantly over the past few years, with the global market value of flexible workspace estimated at $26 billion. Now most companies are splitting their fixed lease liabilities into flexible arrangements to support their long term leases and to reflect the changing nature of business.
With the nature of commercial real estate completely disrupted, it’s no surprise that wellbeing and community are a key component in future real estate trends as we move towards an on-demand business model which is wholeheartedly user-led.
New full service, community-focused campuses and office towers are being developed to match the modern workforce expectations. Older buildings need to be updated and new buildings are setting the standard of smart building tech combined with community and wellbeing and CRE providers are implementing office building apps that build community and add additional value to the tenant experience.
Tenant experience platforms
A rising trend in real estate technology is tenant experience apps. They connect smart building solutions and integrate with other third-party software. It can also provide a more seamless experience for building users by connected amenities and services allowing users to book and pay for things and a place to build a community through engaging content and events. A digital layer at users very fingertips is a smart solution for commercial real estate providers that can set them apart from their competitors. But, as an increasing amount of digital natives joining the workforce, it may be just as important and expected by tenants as your very bricks and mortar.
Future tech real estate
With flexible workspace becoming the new norm and commercial real estate moving towards an on-demand service, we will see a trend towards user-led technology.
Commercial real estate providers must become user-focused and experience-led to reduce tenant churn. Friction will need to be reduced within office buildings to provide a more seamless experience to the user, and an engagement strategy will need to be top of agenda.
As digital natives become an increasing percentage of the workforce, smartphone-enabled features and amenities will become an intrinsic part of smart building infrastructure.
Buildings will listen to users and adjust accordingly, such as lifts predicting the floor it’s needed to be based on past behaviours of the users, and smart lighting that adapts to the occupancy of the building. In an article by Raconteur Andy Heath, Global Head of Site Selection and Acquisition at WeWork said: “An office will track my location and adjust preferences to suit me. After lunch, the temperature where I am sat might drop by a degree and the blinds may go up slightly to wake me up, creating my optimum work environment.” Offices and workspaces will become user-led, optimised and customised by users’ data.
One platform approach
A once archaic industry will now have the tools to streamline and become far more efficient operationally due to the significant investment in the Proptech sector. We will see commercial real estate providers combining their entire asset/property portfolio onto one digital platform. Access can be given to the tenants of individual buildings. Building managers can add and edit content from building updates, events and services. And, operational departments can look at analytics across the whole portfolio or individual sites to drive efficiencies.
Real estate providers, both commercial and residential will move towards cloud-based property management software like Landlord Vision offering full accounting possibilities, management of property maintenance and tenant management. You can also view an Individual property or the whole portfolio’s performance through the dashboard.
Blockchain
The future of real estate trends lies in the hands of data. The next generation of what we understand smart buildings and smart cities to be will be driven by how we interconnect and share data on a global network.
For a competitive advantage in CRE, data has often been hidden, such as valuations and property prices. In today’s hyperconnected world and a demand for higher transparency and technological advancement, all of this is about to change through blockchain technology.
The opportunities of blockchain technology in real estate are vast, from transformed operations right through to public utility services and data-driven city management. Decision-making capabilities will be enriched by real-time data and hours of time saved through the digitisation of otherwise time-consuming offline due diligence.
By 2035, it’s predicted that there will be 1 trillion sensors and connected devices in operation. (A whopping 130 sensors for every human on the planet.) If you thought the internet really shook things up, big data and the IoT are about to take it to the next level.