Disruption has become the new normal for global and domestic corporations alike. While the level and impact of disruptive forces varies across industries, there remains a single unifying factor at its heart and that is technology. The real estate industry in Singapore and beyond is no exception. With the announcement of Singapore’s 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 a rise of innovation, data democratization and our growing understanding of how technology can enable 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.
The 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 the customers. One of the most visible ways it will achieve this is through harnessing data more strategically to improve & personalise the user experience of the built space.
PropTech-influenced possibilities for office workers and occupiers have been popularized in recent months. More sophisticated work places allow users to reserve desks at work, automatically adjusting the lighting or temperature to individual preferences, or even having your favourite beverage ordered ahead of time from your preferred café and ready for consumption at the right temperature as you arrive at your desk - all through an app. Truly disruptive in anyone’s language.
However, the reach and possibilities for leveraging this data extends 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 will be able to map out peak periods of space usage, and shut down power and water supply when they are 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 will be able to 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 Singapore government investing heavily in smart building technology. This model of building management is in-line with the Singapore 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 when landlords can sublet or ‘rent’ out under-utilised space to co-working space owners, or the possibility of other real estate firms to offer co-working spaces and the suite of customer services that come with these offerings.
Cyber security into sharper focus
Alongside the growth of smart buildings, the focus on cyber defence and cyber security will need to become a broader conversation too. With the implementation of smart building technology and the evolution of various user apps to interact with our built environment, so too increases the access points for hackers or ‘digital vandals’ to access buildings.
A new type of cyber-terrorism could emerge, where a cyber-terrorist holds to ransom a building and all its valuable assets. Technology supporting smart buildings will increasingly have to take into account multiple scenarios and building owners invest to safeguard the multi-fold assets of building owners and those who occupy them. The focus around cybersecurity in buildings will only intensify as the scope for cyber crime multiplies.
Automation of smaller deal sizes
The advancements in fintech will logically progress to real estate. Real estate is one of the largest asset class 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.
It is the view of the real estate industry that Prop tech is work in progress but there are many exciting green shoots and a growing industry & 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; sorting 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, not just limited to real estate
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