Disruption has become the new normal for global and domestic corporations alike. While the level and impact of disruptive forces vary across industries, there remains a single unifying factor and that is technology. The real estate industry in Singapore and beyond is no exception. With the announcement of the Singapore government’s Real Estate Industry Transformation Map, and the heightened role of technology and the digitalisation of the sector, disruption has seemingly gone more institutional.
Across the board, conversations about property technology (PropTech) are becoming more frequent. With the rise of innovation, data democratisation and our growing understanding of how technology can give birth to new opportunities, improve business performance and enhance the end-user experience, PropTech has been gaining traction in recent years as one of the biggest trends in real estate. And while companies and governments are still navigating the enormous wave of digitisation and technology, some concrete developments have emerged.
Race to leverage data will intensify
With the Internet of Things (IoT) and plethora of data available, the real estate industry will continue to race to leverage data. It will need to understand data at a deeper level to deliver products that drive benefit to customers. One of the most visible ways it will achieve this is through harnessing data more strategically to improve and personalise the user experience of the built space.
PropTech has been gaining traction in recent years as one of the biggest trends in real estate (Credit: Vincent Mundy/Bloomberg)
PropTech-influenced possibilities for office workers and occupiers have been popularised in recent months. More sophisticated workplaces allow users to reserve desks at work, automatically adjust the lighting or temperature, or even have their favourite beverage ordered ahead of time from their preferred café and ready for consumption at the right temperature as they arrive at their desk — all through an app. Truly disruptive in anyone’s language.
However, the reach and possibilities for leveraging this data extend further, especially in the area of facilities management, an area also pinpointed by the Singapore government. Using the data gathered from meeting room bookings, office usage patterns emerge, enabling facilities management operators to maximise the efficiencies of space: They can map out peak periods of space usage and shut down power and water supply when the space is not in use, or place unused zones in a low-power mode to maximise energy savings. Or they may dynamically make this space available to other enterprises to use in real time.
With increased automation, facilities management service providers can consolidate network operations to manage a portfolio of buildings remotely at a lower-cost location, relying on automated sensors, supervised by a lean pool of highly skilled facility managers. We are starting to see green shoots in this space with the government investing heavily in smart-building technology.
This model of building management is in line with the government’s plan for creating high-value jobs that can stimulate the economy. Automation of building management can lead to the creation of network operation centres, or virtual facilities management centres, to remotely manage buildings. This means that a single facility manager can manage a portfolio of buildings from a virtual centre instead of relying on many lower- skilled workers.
If data is synchronised at a more sophisticated and deeper level, it is not impossible to imagine a scenario in which landlords can sublet or rent out underutilised space to co-working space owners, or the possibility of other real estate firms offering co-working spaces and the suite of customer services that comes with these offerings.
Cybersecurity in sharper focus
Alongside the growth of smart buildings, the focus on cyber defence and cybersecurity will need to become part of the broader conversation too. With the implementation of smart-building technology and the evolution of various user apps to interact with our built environment, the access points for hackers to access buildings will increase.
Technology supporting smart buildings will increasingly have to take into account multiple scenarios and building owners will have make investments to safeguard their buildings and the assets of those who occupy them. The focus on cybersecurity in buildings will only intensify in the future.
Automation of smaller deal sizes
The advancements in fintech will logically progress to real estate. Real estate is one of the largest asset classes globally and presents a natural progression development from fintech to PropTech.
Utilising fintech, we can create new deal origination platforms to match retail investors with developers or institutional property funds. Fintech makes possible the creation of algorithms that act like a dating app, automating the match between investors and the available assets, particularly those that are priced in the smaller sub-million-dollar market.
Nigel O’Neill, CBRE chief digital & technology officer for Asia-Pacific (Credit: CBRE)
It is the view of the real estate industry that PropTech is a work in progress, but there are many exciting green shoots and a growing industry and governmental focus on PropTech. In the short term, progress will be limited by access to top talent and those who have the ability to reimagine a digital real estate world. The second challenge will lie in how we can effectively capture and harness data, separating the wheat from the chaff so we can intelligently leverage data to drive truly amazing outcomes. As with any transformation, it is a journey and the aforementioned challenges are par for the course of any transformational journey and not just limited to real estate.
This article, written by CBRE chief digital & technology officer for Asia-Pacific Nigel O’Neill, appeared in EdgeProp Pullout, Issue 819 (Feb 26, 2018).