COVID-19 impact: Digitalisation powering next wave of change in real estate sector
In recent years a wide range of technological solutions has enabled companies to enhance resilience, maintain stability, ensure business and real estate continuity. However, the adoption of these digital tools has been gradual in some companies as they lacked the urgency or compelling reasons to alter their approach. However, COVID-19 has initiated companies to adopt digital solutions at an unprecedented pace, with the outbreak appearing to be a genuine catalyst for change.
But how will India emerge on the global digitisation curve and why? The world is in throes of the fourth industrial revolution – one driven by the convergence of physical and digital worlds (machine learning, robotics, artificial intelligence, etc). While India must cover significant ground when compared with the developed world, technology is now fundamentally changing the way citizens live and work.
We do often ask as what is digitalisation and why the need for the ecosystem? Many stakeholders believe that digitization will increasingly shape the industry, including the real estate business, real estate marketing and even complex real estate transactions.
According to a survey by CBRE, digitisation is taking precedence across the sector and more than 90 percent of the occupiers and developers are aiming to bring a technological shift in their business operations within the next five years.
Changing global work patterns and a pro-tech government stance is likely to encourage public enterprises and private businesses to adopt newer technologies. Thereafter, our ecosystem of start-ups and established corporates are expected to dive headfirst into the race to apply these technologies to solve unique Indian problems in various assets classes and embrace innovation.
Real estate requirements across the country are rapidly changing and the technology offerings by CBRE is an endeavour to bring customers, developers and operators closer to each other by breaking down barriers of time and geographical location.
The COVID-19 situation has increased focus on installation of collaborative technology and PropTech for business and FM operations. Some of the technologies that have been or can be utilised in the office, retail, project management, FM, logistics sectors and why they are likely to have a far-reaching impact on the real estate industry are as listed below:
Virtual reality platforms
As visualising a built-out space without an on-site visit can be challenging--even when plans and renderings are available-- potential tenants prefer to visit sites in person to evaluate whether a space is suited to their requirements.
For occasions when this is not possible, there exist a range of 3D interactive tools with virtual reality (VR) technology enabling users to conduct virtual tours of potential sites to visualise how they might look in the real world.
CBRE’s Floored Build digitises the site inspection process and helps companies understand what their potential new space looks and feels like and how their staff and workstations fit into it.
Floored Build can create a virtual 3D model from sketches, floor plans, photos and computer-aided design (CAD) images and can also re-create existing space and visualise remodelled spaces or planned sites. Images can be captured and accessed remotely and across a range of devices.
The COVID-19 outbreak has prompted the government and private sector in many countries like India to order or encourage employees to work from home in order to limit social contact.
CBRE believes this largescale–and broadly successful–trial will spur companies to be more willing to accelerate the adoption of flexible working polices in future. While this may result in companies requiring less office space per-employee in the long run, there will be stronger demand for higher quality space capable of encouraging collaboration, innovation and employee well being.
Cloud technology has played a key role in supporting remote working by connecting users with their enterprise databases and other online resources.
Demand is projected to grow significantly in the coming years, with enterprises advised to enhance their cloud capacity to ensure business sustainability. This will also require an emphasis on security. Large corporations typically use Virtual Private Network (VPN) and multi-factor authentication technology to ensure access to data and systems is restricted to authorised employees.
With many employees working from home or other remote locations, companies have deployed a range of technologies to help their staff facilitate communication, perform their day-to-day duties and attend virtual meetings.
Project management apps that enable remote collaboration between teams and allow remote access to documents and folders include Microsoft 365 Suite etc and workflow management tools have also seen rapid take-up.
In addition, client relationship management and sales management software including Salesforce, and human resources management platforms have also started seeing traction.
The convenience offered by these technologies is helping us sustain business continuity during the COVID-19 outbreak, with companies set to continue relying on such tools even when business is back to normal.
Building security and people flow management has become more prominent in office, retail and logistics properties since the COVID-19 outbreak, with property management teams taking steps to augment existing security and hygiene policies to reassure tenants and employees.
In the long run, building managers are likely to make greater use of data analytics tools to facilitate real-time decision making for emergencies and improve the efficiency of building management.
Retailers will soon start using more creative ways to conduct online product merchandising. Live-streaming–an increasingly popular format combining entertainment and e-commerce–is helping retailers foster a “see now, buy now” culture across other markets, enabling them to quickly inform consumers about their products and create a sense of urgency to purchase.
Logistics requirements have risen substantially since the COVID-19 outbreak due to the rapid growth of ecommerce sales, particularly for daily necessities and groceries. This has prompted warehouse and distribution centre operators to accelerate the adoption of innovative technologies to reduce reliance on human employees and guard against the disruption of goods supply and shipping.
Tools include robotics and AI-controlled automation systems in warehouses to fulfil inventory management, sortation, order picking, scheduling and distribution.
Digitisation has also resulted in a more coherent relationship between developers and occupiers; the former are fine-tuning their strategies to be in line with occupier’s expectations on technology and infrastructure. Cost efficiency has remained a major aspect in improving processes and business efficiency.
Technology has enabled companies to digitise processes and make data-driven decisions about how to manage and use space.
Moreover, the current scenario of social distancing and the lockdown of physical spaces due to COVID 19 have led to more importance for digitisation. As a majority of the people pre-research their buying interests online before making a decision, real estate is no different. In this digital era users' expectations have also risen and players that provide a differentiated post-crisis experience will stay ahead of the curve.