Technology Trends in Commercial Real Estate

Unable to attract highly skilled IT workers to diverse geographic locations, technology development and service companies have headed back to CBD office towers, becoming the largest market sector for new leases.

Landlords, faced with an increasingly competitive market in which to attract tenants, are also turning to technology to improve their commercial returns. They are developing new buildings and retro-fitting existing assets as “Smart Buildings,” where building control systems, end devices, and sensors are inter-connected, programmed to work seamlessly with each other, and can be managed remotely over the Internet. The real-time data recorded by these systems are used to accurately control environments to deliver comfort and efficiency. Advanced uses include predictive on-demand maintenance patterns, automatic alerting and self-healing of building systems such as electrical and mechanical plant. Tenants are increasingly demanding access to the same data, and a higher level of control over their tenancies including access control, sustainability, environmental and wellness monitoring.

Historically, tenants built large-scale computer rooms within their tenancies, placing a significant demand on base building power and cooling systems. They required dedicated plant rooms in which to locate electrical generators, UPS systems, and cooling equipment. With the rapid growth in fast, cheap fiber connectivity, these large in-house computer rooms are no longer required, and have been replaced by small communications rooms that connect to remote purpose-built data centers. While power and cooling loads within office environments have decreased, communication rooms have become critical to an organization’s operation, so buildings that offer high degrees of resilience and redundancy including emergency power backup and multiple diverse communication paths and carriers are preferred. At the same time, data centers have become a recognized asset class for investors, a growing source of revenue for product and service providers, and a focus for specialist technologies to control and manage these critical environments.

Opportunities

At $6 trillion, commercial real estate represents 8 percent of global domestic product. Traditional technology solutions including ERP systems, CAD, construction management, property and project management tools have been developed over many years, and substantial upgrades and improvements continue to be released, but the real innovation is happening elsewhere.

Technology companies focused on the commercial real estate market are exploring the boundaries of Artificial Intelligence & Virtual Reality – examples include developing test fits without an architect, exploring 3D buildings and fit outs in real time as a team, agreeing on leases with blockchains replacing paper, using facial recognition for security and personalization. Many of these new products are being delivered “as a service” hosted in the cloud, as businesses outsource non-core competencies to specialized providers, enabling a mobile workforce to access data and applications at anytime from anywhere.

The commercial real estate industry is increasingly attracting investment in market disruptors and PropTech start-ups from around the world, and specialist technology incubators focused on the commercial real estate sector have been formed that select the best ideas and assist these companies to market. Tremendous opportunities lie ahead.

See More: Top PropTech Solution Companies in Apac