Real Estate goes data heavy

In the last few years, technology has brought about a wave of disruption. From transport to retail, financial services to real estate, disruption has become the new norm.

22 Nov 2018

By Vikram Kohli

real estate goes data heavy
In the last few years, technology has brought about a wave of disruption. From transport to retail, financial services to real estate, disruption has become the new norm.

While the gravity of disruptive forces varies across industries, there remains a unanimous element - data. Closer to home, the use of data has been identified as a cornerstone of the ASEAN Smart Cities Network -  the region’s geopolitical masterplan for smart and sustainable urban development with the use of technology as an enabler to improve people's lives. In fact, the fusing of technology and data has given rise to a dynamic new sub-sector of real estate, PropTech.

The facts augur well for PropTech and its role within the ASEAN Smart Cities Network. With 400 million Internet users, favorable demographics where 70% of the population are below 34 and massive urbanization with the rise of mega cities such as Singapore, Kuala Lumpur, Jakarta, Manila, Bangkok and Ho Chi Minh City - this initiative could not have come at a better time. Furthermore, with Singapore acting as a sandbox for PropTech due to its intense focus on becoming a smart city and its leadership in the innovation space across ASEAN, the future looks bright for PropTech.

Given its far-reaching effects, PropTech has been gaining traction in recent years as one of the biggest game-changing trends in real estate. But while technology has empowered the rise of Proptech, it is underlying data that will ensure its proliferation in commercial real estate.

Commercial real estate providers are looking at data sets to build specific solutions and provide more actionable intelligence for clients. For example, PropTech solutions now extend to harnessing sales and leasing and sales activity, asset management data and portfolio valuation data. More sophisticated workplaces allow users to reserve desks, automatically adjust the lighting or temperature to individual preferences, book meeting rooms - all through an app. Using data gathering from room bookings, facilities managers are able to map out usage patterns and place unused zones in a low-power mode to maximise energy savings.

Increasingly, real estate developers are zooming in on big data to gauge trends and predicative behaviors to optimize user experiences. Getting demographic data right is key in developing PropTech solutions for clients.

In our case, CBRE already has multiple tools utilizing commercial real estate data. However, only when referenced against demographics, economic and geographic information are we best positioned to guide and support our professionals in the advice they are offering our clients. We expect to broaden this solution set but maintain a cautiously optimistic approach as there are certain pitfalls facing the mainstreaming of big data-driven PropTech.

The primary challenge surrounding the use of big data in real estate is how to interpret intelligently, securely and from an aggregation standpoint. Next, what insights can be extrapolated such that it meets our clients’ demands, and creates value for their business.

With any large data set comes inevitable questions around security. For any PropTech solution, ensuring that security and data governance are appropriately in place, is essential. The success of the solution will also hinge on data legitimacy – how readily available are complete data sets and how reliable is that data. In the West, there are whole industries dedicated to the aggregation, cleansing, and on-sale of data sets.  In Singapore, legitimacy is understandably high, while across South East Asia, markets are at different stages of maturity. As such, being able to effectively acquire information in a standardized manner is obviously a massive hurdle to any big data strategy.

Despite these concerns, we expect big data to increasingly play a crucial role in reshaping global commercial real estate. For providers, capturing big data and confronting its challenges allow us to meet client needs proactively rather than reactively. For the wider real estate industry, there is no better time than now to strategically navigate the sheer volume of available data, appropriately manage its risks and mine it to build a suite of intelligent, differentiated services to optimize customer experience. In Singapore, a commitment to Smart City initiatives will position the country at the forefront of PropTech for the foreseeable future.

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