COVID-19 has brought the real estate to a unique turning point which may test the resilience of the sector and reshape its priorities and best practices in different ways.
As consumers spend more time at home, residential real estate remains an attractive option from an investment perspective. However, economic fears and uncertainty over the current and future financial position have led to a sharp drop in home purchases across cities and micro-markets. While the long term potential for the sector remains positive, the key questions are how soon will buyers return to the market, and which segments, micro-locations, and services will be more attractive?
Given the work from home or the anticipated growth in the blended working models in future, commercial real estate leasing will see a decline or contract renegotiations, especially where intermediate or long term lock-ins are not in place. A few global companies have announced that they will permanently change their workplace practices, while others are focussing on limiting the interpersonal connection and collaboration of an office environment. The long term impact is uncertain at this time. Will the blended work models reduce the long term demand for office space? Will the need for social distancing and lower spatial density in offices and public spaces counter this and balance out or increase the demand for office spaces?
Either way, users may expect higher standards of sanitation, sustainability, and health safety from the operational management of residential, commercial, retail, and public spaces. This is essential for building and maintaining social trust. At the same time, limited staff – either due to cost pressures or due to social distancing norms or due to a general shortage of people- will have to manage, operate, maintain, and improve site operations to higher service levels.
The sector is, thus, ripe for digitisation, automation, and tech-enabled service orchestration. These initiatives will be along two different axes of innovation and technological intervention.
● Workplace safety
With the help of thermal scanners, CCTVs, Internet of Things (IoT) and Artificial Intelligence (AI), the real estate sector can implement safety protocols for different spaces, incoming vehicles, visitors, and staff. Automated disinfection and immediate notification of potential risks make these new-age solutions extremely crucial in the changing times. However, the arrangement costs are high, and the real estate owners and operators may choose the hardware-based solutions judiciously.
● Worker safety
The IoT and digital solutions, complemented with AI and analytics for real-time notifications of potential risks, will help workers with safety metrics and monitoring of social distancing, and real-time location tracking to prevent clustering. Residential and commercial buildings will benefit by ensuring that the staff and service people entering their premises are safe.
● Service automation and productivity
The AI and IoT will ensure that processes and service levels are managed and optimised to pre-defined SOPs. AI-based platforms can be useful for dynamic orchestration of tasks, services, and dynamic requests and issues. Real-time location tracking of workers will help in identifying staff location, optimise scheduling and allocation, and improve productivity. Digital records of assets and equipment and IOT based monitoring can improve performance. Besides, Cognitive Process Automation can digitally stitch together and optimise the entire operation, including the management and maintenance of spaces, assets, equipment, and people. There will be an impact on the overall flow, usage, and occupancy of people.
Ultimately, a technology which has been a 'nice to have' may move into a 'mandatory and necessary' category. Sustainability, health and wellness, and workflow management may become the norms, requiring the cybersecurity of buildings and staff data in the short-term. Smart buildings may become a reality but in the long-term.
