Three tech trends set to redefine the commercial real estate industry

22 October 2018 Authored by Consultancy.eu

A new study by French management firm Oresys has highlighted the three biggest trends in the global corporate real estate sector, which is currently undergoing a digital revolution.

Slower to unfold compared to digital advancements in other industries such as finance and insurance, the ‘PropTech’ segment – which refers to a broad range of emerging technologies and disruptive models focused on innovation in the real estate sector – is now gaining traction, both for residential and commercial properties and driven from all corners of the market; buyers, sellers, agents, investors, property managers and developers.

Within such a broad sector, the potential applications are just about endless, and include such tools as digital dashboards for property management, drones and augmented reality for design and sales, and IoT-powered smart-buildings to name just a few. Looking into corporate real estate, a new report has examined the three primary trends impacting the global market; smart workplaces, the Internet of Things and the digital revolution in facilities management, and; BIM, or Building Information Modeling.

Conducted by French management consulting firm Oresys in conjunction with its international network of Cordence Worldwide partners, which in Europe includes Horváth &Partners (Germany), Twynstra Gudde of the Netherlands, Italian firm Bonfiglioli Consulting, and Spain’s Alfa Consulting, the study surveyed leading corporate real estate executives, facility managers, and project development managers in 17 markets worldwide – including eight countries in Europe.

Smart Workplaces will be commonplaces in the future

In brief, the survey found that roughly two thirds of companies plan to increase their investment in real estate technology to create smarter workspaces; that nearly 70 percent of facility managers plan to use technology to enhance customer satisfaction levels through more balanced and better-informed building operations decision-making, and; that over 60 percent of construction companies in the world already use BIM on the majority of their projects.

Smart Workplaces

Co-working, telecommuting, flex-office – these are all terms and concepts now firmly entrenched in the minds of a new generation of workers. The Oresys study notes that 78 percent of Gen Y employees consider the quality of the workspace a key criterion in evaluating a potential employer, and new working methods, the consulting firm says, bring new requirements for a contemporary workspace: more modular, more flexible, and less individualised but better adapted to modern work assignments.

Companies, it seems, have taken note, with more than two thirds of those surveyed globally favoring flexible workspaces as a long-term solution. European companies, however, lag their Asia Pacific and US counterparts in terms of planned investment into real estate technology, at just half of the local respondents compared to a notable 78% in the Asia Pacific (although the Europe data includes responses from the Middle East and South Africa as an EMEA bloc). 

Investments in IoT by Companies by Country (USD Mn)

As a break-down of emergent workspace technologies, wayfinding apps, which in short enhance navigation through the physical environment, are across continents the most commonly intended tool for implementation in the short-term (cited by 63% of respondents in Europe) followed by sensors to monitor workspace occupancy (Europe – 47%). The outlier was firms based in the Americas, which, with ‘predictive analysis in asset/portfolio management’ at the top of the wish-list, bumped the prior tools down to second and third.

In Europe, the technology drawing the third highest level of interest was virtual/augmented reality, with an impressive 43% of companies in the region planning implementation by 2021 (while VR doesn’t feature in the top-five responses in APAC). Also by 2021, the European companies surveyed will have introduced energy management controls and personal environment control systems each at an uptake of approximately 40 percent.

Internet of Things

The Internet of Things (IoT), a cross-industry game-changer projected by some reputable sources to grow to a worth of as much as $10 trillion per year globally by 2025, is becoming an increasingly more common feature in modern Facility Management services. Advantages for facility managers include the ability to increase energy efficiency and to optimise maintenance schedules through remote sensor monitoring, in turn delivering savings and ultimately extending the life of a building. 

According to the survey results, some 68 percent of Facility Managers plan to use the technology to also make better-informed decisions regarding construction operations and to cater to the needs of future occupants. A caveat though; old buildings complicate the adaption to connected objects, and according to the report the investment returns remain unproven – reported on average at 34 percent in 2016. For Oresys, the firm believes that in respect to old buildings it could still take a period of between 20 to 30 years for the rehabilitation of the sector.

BIM Adoption

Building Information Modeling

The third of the three major trends gaining momentum in the corporate real estate domain is in Building Information Modeling, otherwise known as BIM. As a basic description, BIM is a project management tool based on 3D modeling which provides a digital representation of the physical and functional characteristics of a facility, allowing for better foresight and management of deadlines and costs in real estate developments.

As per the survey, already 61 percent of the construction companies canvassed report the use of BIM technology in the majority of their projects last year, with the ‘reduction of mistakes and oversights’ cited by 41 percent as the primary benefit, followed by the improved ability to collaborate with designers and stakeholders (35%), image enhancement (32%), and the reduction and control of costs (~22% each).

As to other technologies in property management, nearly 30% of construction companies have already incorporated the use of drones, yet, while technologies such as laser scanning, augmented reality (7% uptake to date), and 3D printing (3%) loom on the horizon, half of the construction sector respondents report spending just 1% or less on technology annually – despite the competitive advantage offered and evident savings in time and costs, not to mention the improvements in safety which emerging technologies will bring. 

“The greatest lesson of this study is the international revival of real estate, which until now was lagging behind in the digital revolution compared to other sectors such as insurance or banking,” Oresys Associate Director Laurent Dequéant says in summary. “Buildings are becoming more intelligent and a real technological catch-up is underway, taking into consideration the Internet of Things, big data, virtual reality or predictive analysis by industry professionals.”

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