Real estate is moving to go digital. The proptech market is booming: in 2019, the capital invested in startups increased by 157% compared to the previous year, according to Forbes. It is clear that real estate is likely to be one of the segments that will benefit most from digitalisation. It first becomes palpable at the stage of real estate marketing. The new wave of digital products is now about property management, and the increasing use of building information models (aka BIM to the experts) is certainly accelerating this trend.
With data scattered across different players, business software and phases of the building lifecycle, digitisation becomes essential to make information more accessible and useful to each stakeholder. Property managers are realising the importance of regaining control of their portfolio. Whether they are property operators or corporate real estate, there are many good reasons to digitise real estate assets. Here are the main ones.
1. Negotiating new contracts
In traditional maintenance contracts, building information falls into the hands of subcontractors. Over time, technical installations are maintained, equipment is replaced, and building information becomes obsolete. When it comes to preparing new tenders (maintenance, cleaning, works…), the inventory is not reliable, which puts the property owner in a weak position.
2. Operational availability from day one
A massive amount of building data and models are produced during the project phase. When the project is finished, property managers can download this data (after some preparation) into their maintenance system. This avoids manual searches and speeds up the encoding time considerably. Above all, it ensures the availability and readiness of building information when it is critical: in the first days of operation. The success of this process depends on the early involvement of property managers in the project phase.
3. optimising internal management
Project and property managers are not the only ones who need reliable and up-to-date information about their properties to work. Often HR, legal, finance, sales and marketing do the same work of finding and consolidating building information for their needs. Giving each department easy access to information avoids having to do the work multiple times.
4. construction as a service
Rigid, long-term leases will become less common. The trend – especially for office space – has been accelerated by teleworking. Users need space flexibility and a seamless experience, from viewing and selecting (co-)work space options, to renting on demand and connecting directly to their work environment. The technology behind this experience requires an easily accessible building information base.
5. consolidated view on the long-term portfolio
Information from building models can also be used to feed into key performance indicators. Multi-year strategic investment plans can rely on them to make informed decisions on the optimal use of space, the choice between renovation/conversion/sale of existing assets, investment in new assets, reallocation of investments, etc. These KPIs need to be near real-time to cope with a constantly changing environment.
The transition is underway
Real estate finds itself in the role of intermediary between supply and demand in an increasingly asymmetrical commercial relationship: on the one hand, there is the growing demand for more flexibility and accessibility, and on the other, unchanged rigid contracts and habits.
However, it seems that this is about to change, as the real estate sector is starting to embrace innovation and at a good pace. By now, almost all stakeholders realise that digitisation will increasingly shape the real estate business in the coming years – from property marketing to complicated property management – and that this process cannot be reversed.
Implementing a clear digital strategy and requirements to make building information easily accessible is essential for real estate operators and corporate real estate. The maintenance of digital building models is crucial to achieve the objectives. These tools need to be simple to allow any project or property management to access the information, and advanced enough to process the digital building models.
In this context, it is still unclear how the different actors will react to digitalisation. Indeed, digitalisation means huge opportunities, but also immense and often insurmountable pressure for small companies that cannot keep up with this rapid development. The next few years will be crucial in this respect, and despite the uncertainty as to which companies will succeed and which will not, it is already clear that we will see an unprecedented transformation of the sector.