'Covid-19 has accelerated need to adopt digital tools in real estate'
Real estate developers should make investment in digital adoption for reducing their operational cost and improving end-products to deal with the challenge posed by the COVID-19 pandemic, according to consultancy firm Bain & Company. The outbreak of COVID-19 has adversely impacted the already weak consumer sentiment in the residential property market and the “demand is likely to be muted until there is economic stability and job security”, it said.
Bain & Company on Thursday released its report ‘Residential Real Estate in India – Unlocking Efficiency and End-Product Efficacy Through Digital.’ “In these pressing times, it is imperative that real estate companies make investments in digital adoption to stay ahead,” the report said.
Internet of things (IoT), digital engineering, advanced project management tools, improved connectivity, data proliferation and adoption of smart phones and hand-held devices, are some technologies that will change operating models in the near term, it added. Other current technology, such as 3D printing and robotics, will also have a long-term effect on the industry, the consultant said. Bain & Company noted that project delivery and timelines have been affected due to disruption in construction activities because of the lockdown, labour shortage and supply constraints.
With subdued demand, it said that developers would face increased constraints in working capital and cash flow. In these challenging times, Bain feels that the priority for developers would be to operate with maximum efficiency and reduce operational costs and leakages.
“Developers that demonstrate thoughtfully redesigned infrastructure upgrades, such as touchless surfaces, digitally enabled entry and exit, resident and guest management systems, smart homes and smart club houses, will attract buyer attention and provide differentiated value,” the report said. In view of this pandemic, Bain & Company said customers are deferring their plan to go for site visits and traditional lead conversion techniques of walk-ins and in-person showflat tours are losing traction. The consultant feels that developers who spearhead adoption of digital sales channels including virtual tours and online customer bookings, will find themselves as the leaders of change.
“Technology can help developers to enhance efficiency with time, cost and quality across the value chain, especially in designing, planning, budgeting and executing on-site projects,” the report said. Bain & Company has listed some select digital interventions that could have a significant effect on developers. This includes Building information modeling (BIM) that uses a standardised machine-readable information model to improve planning, design, construction, operation and maintenance of a facility such as a building or type of infrastructure.
Apart from BIM, a workflow management system (WMS) is a one-stop solution for simplifying collaboration across all stakeholders in the real estate activity chain. “The industry and developers must begin to accelerate their digital transformation journey to improve process efficiencies, redefine the end-product and retool with an upgraded operating model for a new future,” the report concluded.