Irrespective of industry, location or client base, technological advancement is indiscriminate in the disruption it brings. Commercial real estate is no exception.
While the extent of disruptive forces varies across industries, there remains one common element: technology and, more broadly, data. The fusing of technology and data has given rise to a dynamic new sub-sector of real estate, a game-changer known as PropTech.
But while technology has empowered the rise of PropTech, it is the underlying data that will ensure its proliferation in commercial real estate.
Big data refers to a critical mass of data sets. Businesses analyse this data to gain insights into predictive behaviours, trends or customer tendencies. The real estate industry in particular will harness data more strategically to optimise user experiences.
BROAD SPECTRUM
So where does the use of data in commercial real estate now stand in Asia Pacific and globally? To answer this question properly, it is important to first understand that the real estate industry cuts across a wide spectrum of property-related operations, ranging from brokerage to property management, valuation to workplace solutions.
Given this background, 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 data sets including leasing and sales activity, development site trends, building and asset management data and residential sales and valuation portfolio data.
Digging deeper, more sophisticated workplaces allow users to reserve desks, or to automatically adjust lighting or temperature to individual preferences -- all through an app.
Elsewhere, using the data gathered from meeting room bookings, office usage patterns emerge, enabling facility managers to maximise the efficient use of space. They will be able to map out peak periods, and shut down power and water supply when they spaces not in use, or place unused zones in a low-power mode to maximise energy savings.
To enhance the decision-making process and improve support and advice to clients, big data analytics are becoming increasingly dependent on demographic and cultural trends. This is especially useful in diverse markets such as Southeast Asia.
Currently, real estate's relationship with big data focuses more on consumer activity, footfall data, food and beverage consumption activities and the like. Ever more broad geographic data relating to demographics, government infrastructure and macroeconomic data will be front and centre when designing and executing PropTech solutions for clients. Thus, we see the use of data in commercial real estate transcending its traditional boundaries.
PROVIDING CONTEXT
The international property services group CBRE, for example, already has multiple tools utilising commercial real estate data. However, only when referenced against demographic, economic and geographic information are we best positioned to guide and support our professionals in the advice they're offering.
We expect to broaden this solution set but maintain a cautiously optimistic attitude as bringing big data-driven PropTech into the mainstream is not without pitfalls.
The primary challenge is how the data is interpreted -- intelligently, securely and from an aggregation standpoint. Then comes the understanding of exactly what to do with the data sets, how best to analyse them, and what insights can be extrapolated. Then comes the biggest challenge of all: how to ensure it benefits our clients.
With any large data set comes inevitable questions around security. PropTech is facing the same issues. For any PropTech solution, ensuring the appropriate cyber-defences are in place is essential.
The success of data-driven PropTech will hinge on the transparency and reliability of data in certain markets. Before we begin building strategies around analytics, we must first ensure that the data is legitimate. Data legitimacy is built on two key pillars: how readily available and complete data sets are for your industry, and how reliable that information is.
In many western markets, there are whole industries dedicated to the aggregation, cleansing and sale of certain data sets. In Southeast Asia, the most reliable approach often involves keying this information into your local database. As such, being able to effectively acquire information in a standardised manner is obviously a massive hurdle to a big data strategy.
Bringing it all together, big data will play a bigger role in reshaping global commercial real estate. For providers, capturing big data and surmounting its challenges allows 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 build a suite of services based on intelligent information.
Vikram Kohli is the managing director of CBRE Southeast Asia. He can be reached at bangkok@cbre.co.th