How will real estate look in the future and how will the industry transform? What are the main industry trends that may transform real estate operations?
With the release of its 2018 edition of Real Estate Predictions, Deloitte, the multinational professional services firm, is examining 9 industry trends to enhance our understanding of the opportunities within the constantly changing real estate market. These are the following:
1. Wellness, work and real estate
The increasing awareness and focus on greater wellness in the workplace is gaining momentum and businesses explore ways in which the physical building can be the driver for achieving it. Factors such as natural light, air quality, noise, and office design can significantly improve wellbeing of the workforce and subsequently productivity. This growing importance has given rise to a number of new global standards, the promotion of green agenda and wellness certification, adding value to new and older schemes.
2. The rise of co-working space and the need for smart buildings
Co-working spaces, where tenants or members share a range of facilities like furniture, office equipment and operational & technical support is a rising, flexible and optimized model which can often result in lower costs than renting a regular office. Smarter buildings, with Internet of Things to fit numerous users’ needs may noticeably improve operational effectiveness and energy conservation. Provided that the privacy of the buildings’ users and of the collected data is well secured and preserved, co-working space is expected to keep growing and establish itself in the market.
3. Real Estate decision makers of the future
The faster pace of technology, workforce agility and the changing nature of job roles are impacting the organizational design and the interaction with the physical workplace. The decision-making tree is changing with employees more engaged in leadership and business teams being formed and disbanded quickly to better meet market needs. Real estate can be a key facilitator for these new working practices via organizational design of more “stage set” workplaces, embracing flexibility and ensure greater creativity, collaboration, education and socializing through employee interaction, to ensure positive employee experience and greater productivity.
4. Fintechs: Complementing the real estate ecosystem
Fintechs offer innovative solutions and enhance user experiences at a relatively lower cost and faster pace. The recent exponential rise of RE fintechs is not to be considered as a competitive threat to traditional RE companies, though and the latest could consider approaches to adopt engagement models to bounce their current capabilities, such as incorporate accelerators, use fintechs’ platforms and invest in - or even acquire - fintechs companies.
5. Big data and cognitive automation
Real Estate companies could implement robotic and cognitive automation to drive operational efficiency by increasing speed and accuracy, streamlining record management, enhancing compliance and risk monitoring, to reduce errors and frauds and optimize costs.
6. Robotic process automation
Real Estate companies are more and more starting to apply Robotic Process Automation (RPA) in their daily business and advance the efficiency of their workforce. RPA is a software that automates manual, repetitive and rule-based processes and tasks and carries out manual labor-intensive tasks automatically, minimizing human error or the potential for fraud, while reducing manual effort. The enhancement of RPA with cognitive or even artificial intelligence (CI/AI) enlarges the area of application to judgment-based processes and predictive decisions (cognitive automation). The companies that will first use it will get a decisive advantage over their competitors both in the short and long term.
7. Public sector real property leaders to welcome disruptions
Public sector organizations have the opportunity to transform their corporate real estate operating models embracing digital disruption to explore high performance in their property operations and portfolios. The transformation caused by emerging innovative digital technologies and business models can impact the value of existing services offered in the industry. It can also lead to further growth and new opportunities for the business.
8. Re-evaluation and change in commercial real estate
The most likely scenario for the future of the commercial real estate industry involves significant changes in the way we work, live and shop, as well as in who will earn money with real estate assets, as a result of social, economic, ecological, political, and technological disruptions. Working models, on-line shopping and 3-D printing, rental demand, levels and income, individual market players and the government, plus the impact of tech companies, are the fields and factors of re-evaluation and change.
The adoption of blockchain technology in the real estate industry over the past few years is rapidly increasing resulting in the fragmentation of the traditional roles. However, the effectiveness of using blockchain technology depends upon transparency, immutability, ease of transfer and inability to be counterfeited, reducing the time taken to manually enter information and to transfer digital tokens with unprecedented security and ease.
For more detailed information on the above trends, you may access the related analysis here