It has long been an industry resistant to major change, but everything is in flux now for real estate as disruptive technology has truly begun finding its place here. And even if many people's buying, leasing, and rental decisions continue to be driven by traditional factors like location, cost, building quality, and design, everyone is now looking ahead at the most sought-after new customers: millennials. These digital natives will be heavily influenced by what technology a property offers in addition to its other aspects. So how exactly is the real estate landscape changing?
Digitising your design dreams with 3D printing
3D Printer building bridges https://t.co/oYApqTy3nx via youtube pic.twitter.com/DpcUWXRnLy
— STEM Genius® (@STEM_Genius) November 28, 2015
The 3D printing industry was estimated to be worth USD 4.5 billion in 2015—and this figure is expected to rise to USD 17 billion by 2020. There have already been many examples around the world of entire homes and apartment complexes created using 3D printers, with one of the biggest projects currently underway in Singapore: authorities there have recently announced plans to print houses storey by storey as a way of tackling housing issues and lowering dependence on foreign labour.
Dubai has also jumped into the fray, using at 3D printer to help build, very fittingly, the Museum of the Future. One of its attractions will be an office built solely by 3D printing, where interestingly labour costs have been reduced by an estimated 50-80% and construction waste by up to 60%. This is truly real estate 4.0.
At KPMG Luxembourg, we're also excited to have completed our first 3D-printed building using our own 3D printer—check it out:
3d printed Igloo KPMG @KPMGLuxembourg pic.twitter.com/9TEKbc7V0N
— Elena Antonenkova (@ElenaAntonenkov) January 5, 2016
Looking at (not toward!) the future with virtual and augmented reality
Virtual reality is the new buzzword in town: products like the Oculus Rift, Google Glass, and Samsung Gear VR are already edging into the real estate market by providing simulations of our world—and our real estate. It is easy to imagine a not-too-distant future where this technology will save you a lot of time and travelling costs by allowing you to explore and experience investment opportunities easily, regardless of where they—or you—are.
Another dimension is added with augmented reality, which lets the architect take a real-world environment and populate it digitally with buildings and other features. In effect, potential buyers can experience the whole project in 3D before any shovels have even hit the dirt. The way buildings are planned, designed, and purchased may never be the same again.
Bringing buildings, airports, cities, and more to life with the Internet of Things
Smart phones, smart grids, smart heating, smart metering, smart water, smart industries, smart homes, smart cities—it seems like everything is getting smart these days. Indeed—the two finalists in MIPIM's proptech (property + technology) start-up competition this year were respectively in the fields of smart parking and smart logistics.
The Internet of Things or "IoT" promises a world where we rely less on traditional computers and more on technology that is directly embedded into our products, homes, and routines. It simplifies the operations of the hundreds of systems within a building (lights, cameras, heat, cooling systems, sensors, water consumption, etc.) in order to create a single connected network controllable with a single remote device. Energy usage is also regulated in real time which saves costs.
One of the most advanced smart-houses in Europe, the award-winning JewelBox in Geneva, was designed to maximise eco-friendliness and integrate technology in the most inconspicuous way possible. The watering system for its lawn and "green wall", alongside the pool jets, blinds, and solar slats, are all controlled via one system of inputs/outputs, and other inputs collect data from hygrometry, temperature, wind, humidity, and luminosity sensors.
Naturally, a new landscape for the industry means that revenue streams might flow in different places. For example they might come from providing connected home services, monitoring utilities, or offering home delivery services via apps powered by tech companies. If developers want to compete, they need to rethink their strategies and their R&D efforts, and to start investing in new technologies—in short, to start getting IT into their DNA. Who currently has a Head of Virtual Reality? Or a dedicated person who focusses on cyber security or connectivity?
Making big city life safer and simpler with big city data
With populations on the rise and more people headed for urban living, it begs the question: how do cities address the challenges of population growth without risking a collapse of the infrastructure? The magic lies in smart city solutions. Hence, many municipalities are forming public-private partnerships to launch initiatives.
Smart cities use digital technologies to enhance the performance of urban services like water and energy management, transport and mobility, street lighting, and public safety. At the same time these technologies can reduce costs and resource consumption. According to a study by Strategy Analytics, urban information and communications revenues will reach $977 billion by 2022. The potential lies in using the data collected by municipalities to perfect strategies for product distribution, new production site locations, product-pricing, and client data optimisation or analysis.
The Array of Things project in Chicago is another project employing urban intelligence: five hundred sensory boxes, set up on streetlamps around the city, monitor light, noise, carbon dioxide, carbon monoxide, and other environmental phenomena. From them we can see which roads are blocked and when, but also use the data to assess the flow of vehicles and improve longer-term urban planning.
It certainly sounds idyllic, but we are not quite there yet. The International Data Corporation points out the following concern (emphasis ours):
"We continue to see many of the same cities investing in the smart city IoT, but even for cities with pilot projects, there is a lack of citywide strategy at the level of guidelines for implementations. As such, we predict that in 2016, 90 percent of cities worldwide will lack a comprehensive set of policies on the public and private use of drones, sensors and devices. This will result in increased privacy and security risks. Similarly, we see a more acute and faster adoption of public safety and transportation IoT investment, often without a strategic framework, which we believe will lead to more project risk and wasted spending, such as spending on duplicative systems or devices."
Luxembourg: quo vadis?
"Luxembourg has a definite role to play in the implementation of smart cities. Its size, its short decision-making routes, its socio-economic model, its multiculturalism, its connectivity rate, which is one of the highest in the world, are just some of the advantages making it an excellent testbed for numerous developed solutions." These are the comments made by Francine Closener, Secretary of State for Economic Affairs, in her opening address last December at the European Smart & Living City conference. Luxembourg has indeed positioned itself at the forefront of digital development: one example might be the EcoCité project in Alzette-Belval which strives towards energy efficiency, smart city grids that will contribute to a lower resource consumption, and other smart city elements.
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