Once seen as a slow-to-adapt industry, commercial real estate is currently undergoing a digital revolution. Led by both an increase in innovation and an expansion in available data, almost every area of the industry is seeing change.
Compared to the ’00s, commercial real estate agents and property managers have noted the powerful impact that technology has had on the industry and seen the different ways that technology has shaped the world of commercial real estate. With that in mind, let’s take a look at how technology is changing the world of commercial real estate.
What Is Proptech?
Proptech – a new term coined for property technology – has become a huge driver behind the change and advancement in commercial real estate. It involves a wide range of different innovations and advancements. In the ‘90s, it was a term mostly reserved for computer software, but in today’s modern world, it encompasses a wider range of technologies, from AI and blockchain to virtual reality and digital marketing enhancements, with many tailored towards enhancing the commercial real estate experience.
Since COVID, virtual reality property tours have completely changed and revolutionised property viewings and they allow buyers the opportunity to view and explore properties from the comfort of their own home or office. This is especially beneficial for those interested in commercial property who may be looking to buy units, offices or shops in other areas where they live. Virtual viewings mean that these buyers can access the property from anywhere, without having to spend time travelling.
Another area where Proptech is helping transform commercial real estate is through data and analytics. Having the ability to analyse, gather and leverage huge amounts of data is making what can sometimes be a stressful decision-making process easier for commercial property buyers and developers.
The development of advanced analytics tools has provided more insight into things such as market trends, property performance and tenant and viewer preferences. This analytical approach then not only helps to enhance the accuracy of commercial property developer investment decisions, but it also allows for a more informed and agile approach to trends and fluctuations in the market.
Smart Buildings
Another notable advancement in commercial real estate has been the increase in the popularity of smart buildings. These structures leverage cutting-edge technologies in order to enhance sustainability, efficiency, occupant preferences and security. For developers especially, this means adding smart building features into their projects, which has not only become a competitive advantage but also a necessity to meet the growing demand and expectations of tenants.
One example of how smart buildings are being used in commercial buildings is energy management. This includes advanced sensors and automation systems, as well as technical machine learning algorithms, to optimise energy efficiency and consumption within the building. This then reduces operational costs for everyone involved, including owners, developers and tenants. This way, a more sustainable and eco-friendly commercial real estate portfolio can be developed.
Water management is another growing addition within smart buildings and is an area where technology can be truly leveraged. Water management involves improving the efficiency of the water consumption of the premises, as well as the optimisation and modernisation of water heating devices
While water metres have seen some technological improvements over the years, water management has seemingly been left behind. Water management technology allows commercial property owners and developers to use sophisticated features, which can then help to improve their commercial property offerings.
Data Centres
Data centres, often seen as a sub-section of the commercial property market, are becoming a more and more attractive option for commercial property owners and developers who are looking for something more attractive in terms of the asset class that they can offer.
Data centres play a huge role in today’s advancing digital world and they work by storing the huge amounts of data that are being continually generated by businesses and organisations. They also make incredibly attractive investments, which offer stable and long-term lease and purchase opportunities.
Conclusion
Looking to the future, technological advancements are set to accelerate even further in commercial property markets. Huge developments in large technologies such as blockchain, 5G connections and AR are all set to bring new and exciting opportunities within the commercial real estate market. Technology is set to revolutionise the way that commercial properties are marketed and then rented or sold, going far beyond the outdated traditional methods.
Many developers and property agents are intrigued by the growing power that technology is having on the commercial property market and the wider industry. Proptech and smart buildings, as mentioned above, are not simply buzzwords but are leading technologies that are changing the way that we develop and manage commercial properties. Whether it’s the market for commercial property in Hull, or the wider commercial rental market in London, these changes are going to hugely revolutionise the future of commercial real estate.