As various industries started embracing digital technologies, we started coining buzzwords. For example, there was ‘fintech’, ‘adtech’, and ‘insurtech’ that referred to how sectors like financial services, advertising, and insurance we gearing up for change by embracing digital tools and technologies.
Over the last few years, real estate and property management – among one of the largest industries globally – caught up to the race and started making strides in the digital era with PropTech.
So, what is PropTech?
While there are several definitions out there, to put it simply, PropTech is the digital transformation that companies in the real estate space are undergoing, in adopting newer technologies to build, manage, market, buy, sell or rent commercial and residential properties. To expand this definition a little further, PropTech is also spearheading the foray into ‘Smart Cities’, laying the foundation to go beyond single buildings or facilities.
The key technology at the heart of PropTech is IoT, where IP devices and smart sensors are enabling data-driven decision making. While in certain reports PropTech refers to a combination of four areas: smart real estate, construction technology (ConTech), fintech within real estate including mortgage technology, and consumer-facing tech like real estate market places.
Embracing technology and digital transformation results in:
- Improved customer experience
- Greater collaboration
- Enhancing the efficiency of operations
- Positive impact on financial performance
- Predictive analytics to improve future business performance
This may sound like standard speak, but it is an important point. CIOs and technology leaders in real estate and property management are looking to understand the specific impact of IoT and digital transformation in meeting short-term and long-term business goals.
“There has to be a clear, direct link between technology investments and business impact.”
Here are some key data points from the KPMG Survey to ponder over:
- 97% of the leaders interviewed believed that digital and IoT will impact their business positively.
- 93% believed that traditional real estate companies must collaborate with specialized PropTech firms or specialists to experience real impact.
- 73% feel it is a real opportunity to take the industry to the next level. But 25% viewed it as a threat.
- One glaring statistic was that over 56% of the leaders gave their own firms a rating of below 5 (out of 10) for their use of digital and IoT to improve their operations.
Within Smart Real Estate or IoT and digital-enabled PropTech, we believe that there three layers where can technology can act as an enabler:
1.Information Management: This refers to big data and analytics to drive decision making. From predictive analytics on the amount of real estate to be built to cost management of construction materials to marketing and consumer data analytics, data science can certainly help senior leaders. Another area is the use of VR or 3D modeling to capture and analyze building design, before and after construction.
2.Maintenance, efficiency, and sustainability: The second area where IoT, AI, data analytics and digital tools can help with the following:
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- energy monitoring and efficiency
- real estate asset maintenance and management
- building information management systems
- consumer-facing experiences like no-touch entrances, operations of elevators or escalators, etc.
- carbon emissions and design for sustainability
- water management and scarcity mitigation
3.Transactions and FinTech within Real Estate: One area where there is tremendous potential for innovation is around financial transactions in real estate. Right from rent collection to tax planning, FinTech within real estate is an emerging area.
Here, we focus on how a digital transformation and PropTech specialist like Msys can work with the real estate and infrastructure segment to deliver the right technology, with a focus on business impact.
It’s now fairly clear that IoT will play a vital role in transforming the real estate industry. We’re talking smart buildings, smart cities, predictive analytics, and digital twins.
- Smart Buildings and Smart Cities
In next-generation buildings, we have several smart sensors added to the design. This includes energy meters and thermostats, motion sensors that can switch on and off lighting systems based on need, smart door and entry management, and even AI-enabled refrigerators. It can include IoT-enabled security systems including access control to specific locations in a building. It is important to build-in IoT solutions in the design phase of a project, but it can also be an “add-on” for an existing building.
- Predictive Analytics
Aiding these two developments is predictive analytics. IoT enables predictive maintenance of devices/assets in homes and commercial properties. This includes energy solutions, water management assets, building information systems, among others. Having IoT-based sensors alone is not enough. The right data models need to be built to truly take advantage of the data these devices throw out.
- Digital Twins
Racing beyond smart cities and smart buildings, a technology that has been around for a while but is coming into demand is digital twins. Digital twins combine AI (artificial intelligence) and IoT to collect real-time data on all previously unconnected systems in a building, such as mechanical equipment, IT infrastructure, plumbing, roofs, walls and windows, and building automation systems and shows us a real-world prototype.
In simpler words, it presents a digital visual of every physical asset in a building and data related to it.
The Future of Proptech: Buildings-as-a-platform
Today, the US $9.6 trillion real estate industry is undergoing rapid disruption with the emergence and adoption of newer technologies to make real estate more cost-efficient and customer-friendly.
If the Government, commercial real estate managers, and residential real estate owners come together to work collectively to build smart homes, cities and infrastructure, we will be looking at a future where buildings-as-platform will become a reality.
Synopsis:
The industry now is evolving and has some exciting opportunities in store. At MSys Digital, we’ve deep expertise and experience in designing relevant IoT Solutions for your use case. We bring in several years of hands-on experience in IOT, Digital Twins and Predictive Analytics. Importantly, we don’t deploy technology for the sake of it. Our leaders understand specific business needs and scenarios, and then design a roadmap where technology comes in only to solve specific problems.
