Technology is changing every industry. Real Estate and Construction have been slow to adapt to the changes in technology. One particular report puts the sector at just above agriculture in terms of tech adoption. On average Real Estate and Construction companies spend less than 1.5% of their topline on software.
This number is greater than 3.5% for most mature industries. Adoption of technology across Enterprise Resource Planning, Project and Construction Management and Sales/Customer Service are not management consulting buzzwords anymore. They are essential for the survival and potential growth of any large-scale Real Estate business.
Globally, companies are looking at 2-3% of project costs as the budget for software technologies to create cost and time efficiencies. BuildSupply is at the forefront of this change in India and is working with smart companies like Godrej Properties, Vatika, Omaxe, Puravankara and Nelson amongst others in using technology to create scale and efficiency across their platforms.
The Real Estate and Construction industry is the single largest Non-Farm employer in the country. As per a recent report the sector is expected to be at about $180 BN in size by 2020. Despite the large scale the sector still operates in an antiquated fashion providing enormous scope for PropTech companies to create solutions that provide transformational efficiencies.
The sector has also seen significant regulatory change in the last twelve months with the implementation of RERA and GST. These combined with the Government’s strong focus on Affordable housing, Smart Cities and Large industrial corridors (like the MIDC) make it imperative that Technology becomes a key enabler for any participant who wishes to create scale and efficiency in the sector.
Over the last few years funding for Tech companies in the Real Estate and Construction sector, more commonly known as PropTech, has been rising steadily. By late 2016, Venture Scanner was tracking 1,258 Real Estate Technology companies across 61 countries, with a total of $28 billion in funding. The MIT Real Estate Innovation Lab holds a database of over 1,600 Real Estate Tech start-ups. India is the single largest market in Asia for PropTech in terms of number of deals. A total of 77 deals worth USD 928 million have been reported in the PropTech space since 2013 in India.
We are listing below the top technologies that will fundamentally change the Real Estate and Construction Sector. We at BuildSupply have been utilizing these technologies in various forms to service our clients.
Blockchain is an immutable, decentralized database of completed transactions stored in an encrypted block. Many such blocks are linked in a database in a chronological order making the block chain. Once added a block cannot be changed and is shared and validated by the nodes in the block chain network. Thus the information becomes immutable and indestructible. Some major applications of Blockchain in Real Estate are below:
- Validating transaction/sale data from MLS (Multiple Listing Services) like Housing.com, 99 Acres, PropTiger etc for property related information.
- Title Records can be completely digitized and validated.
- Mortgage Transactions can be streamlined and an ecosystem created by enabling people to securely and efficiently share data and money.
Cloud Computing provides computing hardware infrastructure as a service. This primarily includes server space hence making physical servers redundant for most companies. Using the Cloud you don’t have to worry about hardware infrastructure and can focus on deployment and the software infrastructure
- SaaS based Process and Project Management systems are a product of the Cloud. This type of a software platform allows real time collaboration across varied uses in construction like Planning and Estimation, Procurement, Invoicing and Billing, Resource Planning and Time Planning.
- A cloud based platform allows a real estate organization to both access and capture information about potential and current clients for their Lead and Marketing Management/Customer Relationship Management.
Drones are unmanned aerial vehicles that can fly indoors, through densely populated areas, around buildings at low altitudes and to places where it is not possible to reach easily.
- Drone cinematography can create very interesting visual tours of buildings that can help in the sales process. For eg aerial panoramas can be used to showcase views from specific floors before construction.
- Drones can also be used for monitoring progress, safety, material/tools delivery and inspection of construction sites.
AI (Artificial Intelligence) provides software systems capability to build opinions and take decisions based on the learning performed on live and historical data. AI is the core building block for intelligent systems.
- Building Management System can be powered with AI to control and monitor all mechanical and electrical systems and processes in different types of buildings like commercial, residential, industrial and airports etc.
- Location Analytics using GPS (Global Positioning Systems) can provide very rich data that can help create AI for pricing, logistics, delivery mechanisms and site infrastructure amongst other uses.
Augmented Reality (AR)/Virtual Reality (VR) is adding digital elements to real life systems or creating simulated environments.
- AR/VR technology can be used for developing virtual design and save significantly on prototype costs. It showcases the exterior and interior of properties that aren’t built yet so that clients can get a clear look at what’s being offered.
- AR/VR allows potential buyers or tenants to visualize the new properties on a screen or handheld and significantly enhances the user experience. It allows you to create stunning 3D real estate tours and get properties stage.
Internet of Things (IoT) is the network of devices capable of connecting with each other and sending/receiving data making them members of a digital echo system.
- IoT help customers significantly in creating Smart Homes to help manage a variety of systems in the context of a building. Users can now collect and analyze data for Energy systems, HVAC, Plumbing, Firefighting, Mechanical and any other building related systems.
- IoT enabled devices can also help predict and service a variety of functional issues in the buildings like energy usage, fixing pipes or mechanical systems and much more.
As is obvious from the above that technologically will fundamentally change the real estate and construction sector. The successful companies in the next cycle will be the ones that adopt technologies as an integral part of their workflows.