Building Value Through Technology
It is no surprise the covid has accelerated the use of technology in all sectors including real estate. From marketing, finance to construction, all facets of property are witnessing a transformation that are here to stay even post pandemic. By: Sapna Srivastava Bain & Company in its recent report had mentioned that in the pressing times of COVID, it is imperative that real estate companies make investments in digital adoption to stay ahead. Industry experts agree that organizations proactively adopting tech tools whether for construction, sales or transactions, will find themselves as the leaders of change. Tejwant Navalkar, Founder DFX Systems Pvt Ltd, providing engineering based consultancy and solutions stated, “Due to the adoption of new technologies, there has been an overall standardization in the design and installation of services. This helps in faster commissioning of the services without compromising on quality. Also, with the adoption of detectors and sensors, maintenance of building services is shifting from Reactive to Proactive and eventually will move towards predictive approach.” Harsh Pareek, Regional Sales Director, India and SAARC, Trimble was of the view that technology results in improved building designs and can potentially reduce wasteful rework, which is often a result of clashes among architecture, engineering and MEP teams during actual construction. According to Sameer Nayar, Founder & CEO, BuildSupply, technological integration into various stages of the real estate project lifecycle can save the day for stakeholders and developers. The latest technological advancements from artificial intelligence, data analytics and real time performance tracking are a game changer and transforming real estate sector effectively and efficiently. Rajeev Nair, Head Operations, Brigade REAP, an accelerator program focused on real estate technology briefed, “Recent developments in the financial services industry such as banking, insurance, investment advisory etc. have made a profound impact on the real estate sector." Sudarshan Lodha, Co-founder Strata, the techenabled fractional real estate investment platform added, “Technology has transformed the way we look at things and real estate is no different. It is making everything easier and accessible in a scalable fashion.” Another area that is witnessing tech tools incorporation is the security and community management of residential complexes. Ravi Bhardwaj, Head, ERP Business, MyGate explained, “Technology is giving housing societies tremendous opportunities to optimise their costs. But, any new product has a learning curve, so there is a need to educate users and offer proper training support.” DATA IS A NEW OIL IN FINTECH Prop-tech services spanning data management are finding increased adoption in real estate and will play a major role going forward. Explaining the new technologies in finance Rajeev Nair shared some of the ways that Fintech is redefining real estate transactions are: Fractional property transactions: In the traditional real estate transaction, only the HNIs or the Institutions can purchase a commercial real estate property. That concept is changing and recently there are tech-platforms which are enabling retail investors to purchase a fraction of real estate property. Rental yield and appreciation value will be proportionately distributed among the investors. Moreover, investors can now also finalize agreements without being physically present with the help of blockchain-powered systems. Instant home loan sanction: Traditionally housing finance companies took longer to evaluate credit worthiness of the individuals especially businesspersons, entrepreneurs etc. The reject rate was also high because the credit details were not available in the formal channel. With the enhancement in financial technology, data from multiple sources can be quickly collated and an evaluation of the credit worthiness of the buyers is done much faster, hence providing instant paperless loan approvals and online verification too. This also enables a huge reduction in the rejection rate of loan approvals. Automated Payments: Even now, the payment collection process is mostly manual. This is changing as there are companies which can automate the process of rent/lease connection for commercial & residential properties. The experience is much more seamless now. Sudarshan Lodha, added, “In factional real estate investment, any property that is shortlisted, with the help of technology, goes through a robust filtration process that is based on the location, building specifications, profileof tenants, history of rental yield, capital appreciation, sale price, etc. Further, these data are presented in a form to our investors, which helps them to decide on the investment in a transparent manner. Investors staying anywhere in India or overseas get access to an online dashboard that allows them to track their performance of investments anytime. Investors can also view current NAV, yields, tenant details, legal documents, and download reports. Investors also have the option to add family accounts and review performance across multiple accounts. Automation, Big Data analytics, Artificial Intelligence, Virtual Reality, 3D printing, IoT are some of the technologies that can bring super experience to the customers or investors and play bigger role in engaging them. Its technology that will make their investments feasible and more flexible in the times to come. Especially the concept of fractional investment model enables one to invest in fractions of premium commercial properties to earn a monthly rental yield and thereby build long-term wealth. The cutting edge technologies in real estate will reshape existing working models with creative tech-driven solutions transforming the real estate sector forever giving investors and end-users a plethora of services in one click. BUILD & CONSTRUCT ALTERATIONS Globally, the property construction cost is increasing at an alarming rate. Top it with low productivity levels, low margins and shrinking skilled labour pool. This has increased the demand for more efficient construction techniques. Recent technological advances have put offsite and modular construction firmly on the spotlight. According to proponents, offsite construction is an answer to many of the challenges currently facing the industry. The building blocks can be developed at cheaper cost because of low production cost and higher scale. Sameer Nayar said, “Digitization of processes like cost planning and estimation, procurement and vendor management, real-time information access, predictive analysis etc bring standardization, efficiency and cost control. From pre-construction to closeout, technology has enabled complete process control and efficient project delivery across all stages of engineering, procurement and construction. Some of the technology tools that can boost productivity in construction include 5D building information modelling, robotics, cloud and mobile based collaboration software, e- procurement tools, drone and site sensors, modular buildings etc. Indian construction industry is a huge GDP contributor, and the sector should focus on implementing innovative technologies to boost productivity and outcome.” Rajeev Nair agreed, “Real time collaboration software functions as the digital backbone for the construction process from start to finish. Rework costs delays projects and increases construction cost by as much as 10%. Use of project site management tools help track the project status basis the real-time data available from the sites. This helps take faster decisions and save money. This also helps monitor defects and track rework projects thus saving costs and timely completion of the projects. Moreover, BIM technology will be the catalyst for a fundamental change in how we manage, design and develop a construction project. Some of the construction activities like plastering, painting can be automated to a large extent.” All construction projects need their managers to focus on 4 fundamental pillars of a construction project i.e. quality, safety, time, and costs. Modern construction software goes a long way in strengthening these 4 categories of considerations for efficient construction. Along with other tools, software helps shorten project schedules and timelines, reduce costs, and support additional workflows like on-site assembly, progress tracking, and even asset management. Harsh Pareek opined. “The construction industry is notoriously labour-intensive and suffers from a perennial shortage of skilled labour. The adoption of modern construction technologies and processes - Constructible, Content-enabled and Connected Construction can help facilitate remote or offsite working, and thus enable the construction industry to meet its project goals even in these challenging times. Furthermore, collaboration tools like Trimble Connect help bridge the gap between construction sites and back offices; in turn mitigating the risks and reducing cost overruns. Technologies like Mixed Reality (MR) enable better visualization and project coordination throughout the project lifecycle. Using MR tools like Trimble’s XR10 Hardhat, city planners can visualize a new building design in the exact spot where it is to be erected or a work crew can identify the exact position of underground cables or pipes before actual digging is started. When field workers can see their models overlaid in the physical environment, more precise collaboration and project tracking and coordination is possible, which directly translates to faster and safer construction. Ravi Bhardwaj added, “Our technology, for example, allows clients to reduce manpower costs by increasing the efficiency of most staff (security, administration, etc), eliminate accounting software costs by providing them with a free end-to-end financial management solution, and offers several tools that ensure smooth running of the apartment complex (complaint management, move-in/ move-out checklist, etc). The App also allows complexes to go completely paperless, eliminating the need for paper notices and bills.” DIGITAL SALES & MARKETING TECHNOLOGIES Some of the technologies that will be a ‘new normal’ for sales and marketing moving forward are: Virtual walkthrough of the site, Online booking, Digitization of agreement paperwork and Customization at every customer touch points. “Virtual tour of the projects have become the new normal, reducing the cost of sales. Also, the consumers are more accessible through digital media such as Facebook, Instagram, and Search Results etc. This is leading to a surge in social media, SEO/SEM, Website digital spends. Often the developer’s sales team lose track of the customers coming from different channels and that’s why they find it difficult to calculate ROI through different marketing channels. This will change with usage of tools to track every lead and customer through every touch points. Accurate ROI can be calculated and this would lead to improvement in marketing efficiency,” said Rajeev Nair CHALLENGES & POTENTIAL OF TECH TRANSFORMATION Sometimes it’s hard to change behavioural patterns. Most of the middle management in organisations are used to doing things one way, and making the effort to evaluate new technologies and change processes is hard if the old way of doing things still works for them. It’s like trying to fix something that isn’t broken. Rajiv Nair feels, Indian real estate still works in a hierarchical manner and there are multiple layers of approvals that need to be taken before any new technology deployment. “Tailwinds in the industry: Demonetisation, RERA, GST and current COVID crisis has impacted the sector negatively. This has made the priority shift towards “Survival mode.” Tech is often seen as a “nice to have” and not a “must have”, hence adoption of new technologies is slow” “It is because of lack of awareness, knowledge, and inaccessibility of smart data in real estate. In addition, many fear to experiment with the new age technologies. Adopting a technology also involves cost to it because of which many companies are on a back-foot when it comes to implementation. While it may involve big investment at the start in a long run it fruitful. Having, said that Covid-19 has led to quicker adoption of technologies mainly by the large scale real estate companies and by the new age technology driven companies, said Sudarshan Lodha “Indian construction industry has a 'slow to change' mentality when it comes to technology adoption but the recent pandemic has unlocked the potential of technology for speeding up construction processes. Prop-tech and technologically driven construction project management will effectively reshape the realty sector. Real estateplayers have started to engage with new technologies such as workflow automation, procurement automation, virtual reality, AI led home buying and selling experience, not only in terms of project management, but also in simplifying the property business end-to-end. Companies that are implementing new age technologies are reaping the rewards with increased productivity, lower costs, better collaboration, higher margins and overall profitability, expressed Sameer Nayar Tejwant Navalkar felt that the major reason for slow adoption of new technologies is that the market is driven by tradition and maximizing profits. “There is a lack of consumer awareness about the benefits modern technologies, so they are not able to drive the market in the right direction. Further, due to lack of awareness amongst consultants with regard to the new emerging technologies, they are very often guided by vendors. But with a lot of focus on IoT, Artificial Intelligence and Machine Learning, these techniques can be implemented in the building industry right from design stage, where the guidelines, rules, available products can prompt the designer to make the right choices. Similarly, if BIM is adopted universally and be linked to Inventory management, the construction can proceed in a uninterrupted manner, with almost zero defect buildings. With sensors installed to measure the health of each equipment installed and using AI techniques, we can movetowards predictive maintenance, to give the users and seamless, faultless system.” As per Harsh Pareek, two major forces are accelerating the adoption of technology in the Indian real estate. “First is the imminent economic and sectoral slowdown on account of COVID-19 pandemic that is exerting unprecedented pressures on margins and profitability of construction companies. Secondly, a highly competitive market environment is also driving tech adoption among the larger and more ambitious companies. Some of the largest construction companies in India are already far ahead in their technology usage and are now acting as perfect role models for the larger industry to follow suit,” CONCLUSION Resistance to learn new ways of performing tasks and unwillingness to invest in new technologies are the major reasons for inadequate adoption of modern technology by Indian real estate. But, in the recent years, with widely available and affordable mobile devices including smartphones and tablets and high-speed mobile data connectivity, technology adoption has seen a spurt. In the post CPVID era, real estate is all set to accelerate its digital transformation by embracing modern technology and cloud-based tools, which in turn will help the industry players meet project deadlines while reducing costs and wastage.
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