Real Estate: It Technology Trends For In 2020
Real Estate is one of the most significant sectors expected to contribute to 13 percent in India’s GDP by 2025. Today, it is undergoing transformation due to multiple influences. Market Dynamics, demonetization, introduction of compliances like RERA, GST has practically forced smaller, unorganized businesses to shut shop with larger professionally run Real Estate Developers dominating the sector. Though commercial real estate is doing well, residential part is struggling due to flagging demand. Investors have moved out and buyer profile has moved to a choosey end user in residential sector. In current stressed scenario, developers are focussing on creating value through delivery of unique ‘Customer Experience’ and ‘Execution Efficiencies’. And for this, they are consistently investing in Information Technology to create competitive differentiators. IT trends in Real Estate sector in 2020 and beyond are driven by these considerations. Here are some trends:-
Building Information Modelling (BIM) Real Estate is a long cash cycle business. Therefore, for any real estate developer, translating an architectural design to a constructed building with maximum speed and efficiency is paramount. Also, since material and labour are major cost drivers, controlling these is a priority. Today, this is fraught with fragmented processes and data. This results in material wastages, delays with weak monitoring and control over execution. BIM technology is the answer to this.
It can provide integrated modelling of building in 5 dimensions (5D BIM) – 3 spatial dimensions + cost and schedule. It is now possible to create Digital Twin of building before construction of the same. It offers huge advantages by providing seamless integration of data and processes from ‘concept to handover’ and enables single version of truth. Even 1 percent efficiency improvement in construction cost and timelines can save crores in a typical project.
Mobile Apps) We can expect a big boost in mobile apps deployment here as there are many effective use cases. Execution efficiency can be boosted by digitizing the paper driven site processes such as quality inspections, requests for information (RFI). Example - If the TAT for RFI can be improved, the speed of construction will improve as well.
Investors Have Moved out and Buyer Profile Has Moved to a Choosey End User in Residential Sector
Enabling these processes using mobile technology along with BIM integration can offer an effective tool to monitor and control contractors’ work as well as their own field force. This is a definite efficiency booster. It also can help in enhancing environment, health and safety (EHS) quotient/ compliance for the sites through digitization and transparent processes.
We will also see efforts to provide customers, a premium experience through mobile driven managed services to satisfy the expectations already raised by the likes of Amazon.
Artificial Intelligence & RPA AI offers a lot of opportunities to improve site execution. Example - AI can be deployed on footage obtained through a normal CCTV set up to automatically measure and monitor material receipts, minimize pilferage, identify and control labour movements, detect safety non-compliances, monitor and report actual site work progress (drones can be used as well). In retail space, this can be similarly used to work out foot falls analysis, customer demography, customer movements, scheme effectiveness etc.
Robotic Process Automation (RPA) will be deployed to automate repetitive back office operations further boosting the operational efficiency.
Augmented Reality (AR), Virtual Reality (VR) AR/ VR may be leveraged to uplift customer experience substantially for all real estate sub-sectors like residential, commercial, retail and hospitality. Example - AR/ VR can allow the sales team to convey a compelling value proposition by providing a very realistic feel of the final product. This also applies for prospect that is in a different geography altogether where site visit may not be feasible.
Additional value creation with tie-ups with furniture makers, interior designers is also possible with this technology. Combining BIM models with AR/ VR, it will be possible to offer a ‘custom home’ experience where a buyer can customize his home by doing a virtual walk through. All this can improve ‘walk-in to booking’ ratio even while allowing developer to charge a premium.
Internet of things (IOT) IOT can be used very effectively by EPC contractors to connect high value construction machines and workers to monitor utilization. Running analytics on the data thus gathered can float up many actionable insights to boost efficiency and safety. The cost benefits then can be passed through to developer.
On the customer side, Smart Communities and Smart Home using IOT is already becoming a trend. Integration of home devices (ex: smart curtains, lighting) with Alexa, Google Home is allowing people to literally talk to their home taking the ‘live -in’ experience to a new level. More developers may offer this as a standard part of their offering.
Analytics Real Estate is influenced by micro market parameters and does not permit rapid course corrections. A developer must decide upon the right product at right price for the right location. Consequences of error can be serious and irrevocable. Data Analytics may help a Developer to take better informed decisions by providing insights into the micro-market and other relevant dimensions. In India, many companies offer Data Analytics as service (Ex. Liases Foras, Propstack).
For operational insights and decision support, analytical dashboards can be created based on in house data that can be mined from ERP, CRM, BIM and other critical systems.
Others Other technologies such as blockchain, crypto currency transactions may be a bit further away in future. Though considered a laggard till now, Real Estate Sector is fast catching up on technology. Future will belong to only those who embrace the technology to achieve the competitive edge.