The commercial real estate sector is no stranger to innovation, particularly in the realm of technology.
"Proptech" – short for property technology – is a term coined to describe the wave of companies using technology to refine and reinvent the structures, systems, and experiences within the real estate industry.
In an era where digital transformation is the norm, commercial real estate is increasingly reliant on technological advancements to drive growth and efficiency.
A global survey conducted by KPMG in June and July 2018 on 270 real estate decision makers from 30 countries across Europe, the Middle East, and Africa (EMA), Americas and Asia Pacific reported that 97% of real estate companies believe that technology and innovation will significantly impact their business.
This figure is particularly pronounced in thriving markets such as North America, Europe, and the Asia-Pacific region, where the adoption and integration of real estate tech are pivotal in maintaining competitiveness.
Emerging Technologies in Commercial Real Estate
As we look toward the future of commercial real estate, several key technologies have emerged as influential forces.
1. Augmented Reality
Augmented Reality (AR) is becoming an integral tool in commercial real estate, transforming property visualisation and interaction. AR overlays digital information onto real-world settings, offering an immersive way for potential buyers or lessees to understand property spaces.
AR can visualise the potential of a property by projecting virtual furniture or renovations onto empty spaces. This technology allows clients to personalise viewings by selecting different layouts or designs, making the property exploration process more interactive and engaging.
For real estate professionals, AR can enhance property showings by providing instant information about a property's features, contributing to a more comprehensive viewing experience.
Consider the IKEA Place app, which has successfully leveraged AR in retail. It enables users to visualise IKEA items within their homes, illustrating the potential of AR in commercial real estate.
By merging the digital and physical realms, AR is poised to significantly shape the future of the industry.
2. Building Information Modelling (BIM) and 3D Modeling
Building Information Modelling (BIM) and 3D modeling are transformative technologies in commercial real estate. BIM allows professionals to create detailed digital models of buildings, promoting collaboration and avoiding costly pre-construction errors.
Supplementing these technologies are LiDAR and drones. LiDAR uses laser light to generate accurate 3D data, and when paired with drones, it enhances site surveys and inspections by accessing challenging areas.
Companies like Matterport and DroneDeploy have embraced these technologies. Matterport creates immersive 3D models of real-world places, while DroneDeploy offers cloud-based drone mapping and analytics, improving site inspections and decision-making.
Together, these technologies streamline the decision-making process and offer the potential for innovation, driving the commercial real estate industry's progress.
3. Smart Technologies and IoT
The Internet of Things (IoT) is swiftly becoming integral to commercial real estate, paving the way for smarter, more efficient buildings.
IoT devices, ranging from smart thermostats to advanced security systems, can monitor and optimise building operations. Companies like Honeywell and Siemens offer integrated building management systems that ensure regulatory compliance, enhance air quality, and increase tenant satisfaction.
Furthermore, smart buildings often support sustainability initiatives, aligning with energy efficiency goals and contributing to broader environmental stewardship.
Blockchain, renowned for its transparency and security, is becoming a vital tool in real estate transactions.
Smart contracts – self-executing contracts with the terms directly written into code – can simplify property sales and lease agreements, while digital wallets ensure secure and efficient transactions.
Companies like Propy are pioneering blockchain use in real estate, enabling seamless cross-border transactions and even fractional sales, which allow investors to purchase a portion of a property, thereby democratising real estate investment.
5. AI and Automation
Artificial Intelligence (AI) is revolutionising customer service within commercial real estate. AI can integrate into CRM systems to provide rapid, personalised responses, streamlining transactions, sales, and marketing.
Companies like Salesforce offer AI-powered CRM platforms that can automate routine tasks such as document and invoice creation, freeing up valuable time for strategic tasks.
Additionally, AI can power chatbots, offering instant customer service and lead generation capabilities, and it can assist in predictive analytics, providing valuable market insights.
6. Digital Twins
Digital twins, virtual replicas of physical buildings, bring several benefits to commercial real estate.
They can predict maintenance requirements, conduct sustainability analyses, and provide valuable insights for building management and planning.
Companies like GE Digital offer digital twin technology that can model an entire building or city infrastructure, enhancing the capacity to analyse and optimise building performance in real time.
This technology is an important tool for future-proofing commercial real estate and enabling smart city development.
The Transformation of Flexible Workspace
Technology is revolutionising flexible workspaces, providing cost-effective and adaptable solutions tailored to modern business needs.
They offer high-speed internet, comfortable work areas, and meeting rooms, making them appealing to growing startups and independent professionals.
On-demand desk spaces, like those from U-Desk, one of Compass Offices’ services, offer flexible short-term office solutions. These services are ideal for freelancers, remote workers, or businesses needing temporary additional space.
The face of commercial real estate technology is changing as a result of the emergence of flexible workspaces. Businesses in commercial real estate are given possibilities to diversify their portfolios and serve a larger range of clients as a result of the shift toward more flexible work options.
Embracing the Digital Future of Commercial Real Estate
Looking to the future of real estate innovation, it's clear that technology and automation are taking center stage.
As the industry evolves, tech tools like real estate AI are set to become vital components of its growth and success.
The use of technology in commercial real estate, however, goes beyond simply keeping up with trends – it also involves laying the foundation for a future that is more effective, sustainable, and open to all.