Real Estate has always been considered the safest asset. Especially in regions that is asset based, these illiquid assets are valued highly. The disruptions in the business world has naturally allured the real estate industry to look up and take notice. Needless to say the Real Estate Industry also feels the need to reinvent itself so that it stays at par with the technological developments that now make our business world. There has been a lot of changes that are surely to disrupt this industry as we know it. Entrepreneurs must keep themselves updated to the changes that are slowly shaping the new avatar of the real estate industry. It looks quite in awe with the technological revolution. Here is a look.
1. Digitalisation of the Real Estate Institutional Infrastructures:
Digitization penetrated through all kinds of business. Real Estate has also started to speak the digital language. The digitization of land registries, smart contracts etc., has opened up a new dimension in the real estate world. There has emerged a decentralized and distributed real time models of value creation and pricing that was not there before.
It is a possibility that the future of the real estate industry might see economic departments charging license fees based not on a fixed square foot area but maybe based on the value of a tokenised real estate lease.
2. Digitalisation of the Real Estate Regulation and Compliance:
The digitalisation of the Real Estate Regulation and Compliance has transformed the shifting planning policy from regulating use classes to regulating pollution contamination and impact using distributed sensors real-time planning based on impact and not use-class proxies. Thanks to this development the real estate industry can now look at transcending industrial zonal logics. It can look forward to drive planning from focusing on outcomes, set up compliance mechanisms at all value chains and finally change the role of regulatory authorities from regulators to enablers
3. Hybrid Models and Instruments:
The Hybrid financial models and instruments will change the way incentive structures for future builds. It is possible that in the future the construction finance is linked not only to project feasibilities but to how well one can build from a sustainability perspective.
4. Space Use:
Technology has brought about the popularity of co-working and co-living. Entrepreneurs are now focusing on creating constructs that are shifting the model of real estate from a completely product and asset service to something that is driven by data and outcomes and a lot of continuous optimization. This is an emerging trend in the real estate industry where space is not valued just by the utilization and efficiency but by contribution that it makes to the environment.
It is possible that the real estate industry would have entrepreneurs and consumers alike valuing a construction not on the basis of how aesthetically enhanced it is but how well a construction contributes to a community and economy.
We have already seen how the emergence of E-commerce has reduced the need for Brick and Mortar stores. However, with the advancements of AR, VR and AI it is very possible that there is an increase in real estate showrooms that can give consumers a virtual experience of the floor plan. People are looking at having an AI enhanced experience to better decide on their real estate choices. This trend would only become more sophisticated and mainstream and unlike the other stores there will be an increase of retail real estate in the future. Entrepreneurs who are eager to show their great real estate treasure must not only look at changing the way their businesses work but also look at what experiences they give out. It is great if entrepreneurs can start by bringing in the AI technology that can help them go the AR way of doing business. It is no longer a fantasy that they can decide to focus on later but something that is very important to take their real estate business forward.
6. Manufacturing and Automation:
Everyone is aware of Wikihouse an organisation that is challenging the means of production of the real estate industry. It has worked to decentralise and distribute the means of production and while making an effort to distribute innovation, creativity and care. It has now become important for people in the real estate industry to be able to respond to automation by tapping into these areas of their workforce namely – care, collaboration, and the capacity to utilize their collective intelligence. The emergence of 3D printing office and 3D printing strategies will lead to a new way of construction where entrepreneurs would have to think how the software can back the hardware and collaborate with different individuals to co-create the future of real estate.
7. Universal Policy:
Technology has made it possible to think and implement erstwhile philosophies like universal basic income, equality policy etc. The emergence of something like the universal basic income would change the economic geography of the real-estate model. The equality policy would help entrepreneurs recognise the effects of the environment on social and spatial justice. Things like these and many more like data driven environment, etc are already starting to change the way entrepreneurs think about the real estate industry. The future of real estate would be very different from what it is today.
Are you prepared to face the changes? Are you aware of what you need to change in your real estate business? It is best that you answer these questions before you find yourself talking in a business language no one understands any longer. The areas in real estate like economic geography, spatial typologies, design, business models, ownership models and governance would change a lot because of the innovations brought by the disruption in real estate. Entrepreneurs must learn to move with the changing times. It is wise for entrepreneurs to keep a track of the changes and implement them in their real estate business. This will keep their business safe and in the company of business success.