Original article was published on Artificial Intelligence on Medium
Digital Technology in Real Estate — Proptech and Smart Buildings
Application of digital technologies in real estate(commonly known as proptech) are helpful for: (1) creation of smart buildings where tenant and end consumers can interact with digital technology on a day-to-day basis to enhance their experience in the real estate properties — residential as well as commercial (2) Improve facilities management services and reduce operational costs (3) the operations of real estate companies to enhance their efficiencies, reduce costs, increase safety at work and minimize errors. Real Estate consultants and experts, technology consultants and experts as well as automation and analytics consultants and experts are likely to play an important role along with information technology consultants and experts for the application of digital technologies in real estate (proptech).
With the advancements in technologies and increased applications in almost every sphere of life, today’s tech-savvy consumer looks for enhanced experiences in real estate space too. With the changes in consumer expectations, the real estate players may look forward to increase their investment in technology to either meet the consumer expectations or reduce the gap between expectations and service offerings. During, 2017–24, the global market size of artificial intelligence in construction is expected to grow at CAGR 39.2 percent to reach US$ 3,161 million in 2024.
With the application of digital technologies in real estate space, the future lies in the development of ‘Smart Buildings’ for commercial as well as residential spaces. Sensors (connected with IoT devices) can be placed at various places in the smart buildings to gather the data, which can be further analyzed to develop trends and insights for decision making and actionable mobile apps(along with machine learning and automation) to enhance consumer experience. Through smart buildings, real estate developers may look forward to use data analytics to assess consumer preferences and behavior and offer unique experience to each consumer. These smart environmentally friendly green buildings have less carbon footprints and reduce costs of utilities due to optimal utilization of water and energy (electricity, natural gas, etc.), and waste reduction.
To offer consumers enhanced proptech experience, real estate companies may look forward to invest in-house capabilities or partner with technology companies.
A few applications of proptech in commercial smart buildings are as follows:
For working professionals — Provide workplace flexibility through ease of booking office work-desk, locate a colleague’s work-desk, book meeting-room, connect digitally with colleagues or clients or vendors, submit service requests, submit property maintenance requests, finding real-time parking in or around office campus, etc.
In cafes and restaurants — Book table and order food in advance, robots and robotic arms for services, digital payments, etc.
Hotels — Entry through facial recognition (or through mobile-app) without the use of keys or keycards, robots for in-room services, etc.
Retail — Virtual Reality for the ease of browsing through products, virtually trying-on clothes, personalize shopping experience through shopping behaviors and patterns, fight retail crime such as shoplifting through facial recognition, etc.
A few applications of proptech in residential smart buildings are as follows:
Interconnected home devices and appliances — either auto-controlled or mobile app controlled — thermostats, security systems, electrical systems and appliances, lighting sensors, etc.; facilities management, real-time property maintenance, real-time spotting of parking space, neighborhood guidance and updates.
Apart from the use of proptech for end-user experience, the real estate companies shall have to adopt technologies to reduce their cost of operations, increase efficiencies and reduce manual errors. To address the issue of labour shortage and manual errors, real estate developers can utilize automation for repetitive tasks, and machine learning and artificial intelligence for high skill jobs.
A few applications where real estate companies can utilize digital technology are as follows:
Marketing and sales: To display ads to the potential customers, show property offerings based on customer preferences and provide buy/sell recommendations to brokers based on their past buy/sell behavior and records.
Property financing: Automate repetitive processes such as financial modeling and data entry; recognize trends and make decisions for risk forecast, property appraisal, etc.
Data management: To provide proper structure to the unstructured data or newly collected data, this can be analyzed to take necessary action eg: predict market bubbles, estimate value of a property, etc.
Construction Site: Pre-fabricated structures, robotics and cognitive automation can be used instead of manual labour for faster, high quality, efficient, error-free and safe construction activity. Drones can be used for site survey, monitoring construction progress, security surveillance, etc. 3D printing technology can be utilized for precise measurements and address issues faster compared to the traditional method.
The application of digital technologies should not be random or in silos. To be effective, digital transformation should be a part of the overall strategy of real estate organization. IT infrastructure, company capabilities and employee upskilling should be carried out proactively to make digital transformation a success. They can also collaborate with technology companies for technology integration in their day-to-day operations.