Smart cities built on digital technologies are having a profound effect on the real estate world and buildings as we know them are changing. And there is good reason to: according to the UN, by 2030 two-thirds of the world's population will live in cities, and Dubai has the opportunity to lead the way through state-of-the-art smart city initiatives. So, what has changed already and what further changes can we expect to see?
I envision a world where homes and workplaces will become tailored to the way we now live and our digitally-empowered daily routines. In Dubai, the smart cities initiative has already seen city infrastructure begin to transform, using digital solutions and tools to address civic issues like public services, parking, street lighting, utilities and resource management via smart meters and we are now even seeing plans for autonomous vehicles for mass public transport. But in real estate, residential housing and commercial offices, developers are going to see growing demand for smart homes and offices - for developers this is an opportunity to add value through smart solutions and services.
New technologies, new types of developer
As in many other industries, digital technologies have disrupted traditional ways of doing things, but real estate is still really evaluating how it can maximize the benefits of digital technologies and smart solutions; how can developers best serve both the residential communities and businesses that set up in their new buildings and developments.
Different end-users have different demands of technology. You might for example have a villa in a Dubai development and expect to have a facilities management company on hand to provide you with smart home services (such as a platform offering services, security, waste and energy management?) - real estate companies should now think about branching into offering that kind of solution. Real estate developers could in effect become white-listed companies offering facilities management that residents are demanding.
By extension, real estate developers could also consider applying this thinking to commercial properties and offices - digital tools can give them the ability to offer security services, facilities management and more to office buildings and business premises. In short, services that were not previously monetised by developers and real estate companies could now become so thanks to digital technologies. Some developers have already recognised this and got started - they are using smart management platforms that enable them to work as ‘service brokers', connecting residents (or businesses?) to potential service providers.
Smart real estate initiatives already underway
The government of Dubai has now created a roadmap that comprises over 500 smart initiatives and services spread out over eight government entities and two smart districts. The infrastructure for this roadmap is extensive and has required investment of around $8 billion. The first stage of these initiatives has been designed to focus on connectivity and technological infrastructure, including programs such as Smart Governance.
The next state of the roadmap targets Smart Living, an area which holds huge potential for the construction and real estate development industry, in which fast internet connectivity from homes, mobile phones or workplaces creates secure access to city services and confidence in transacting online. The government has recognised that the role of real estate developers and construction companies is a vital one in delivering on smart city projects. Among the forward-thinking smart city projects planned for Dubai is the Desert Rose Housing Project - a smart and sustainable satellite city project for 160,000 residents powered by roof top solar panels generating 200 megawatts of electricity.
What other tech trends can we expect in real estate?
Artificial intelligence is on the rise in most industries, and real estate is no different. IDC predicts that 75% of real estate developers will use AI technology for at least one business application or service in 2018. And just as AI-powered virtual customer service agents and chatbots have been deployed in other industries to help field questions and automate discussions with customers, freeing up human time to perform more complex tasks, AI ‘employees' can free up human agents to provide hands-on, high-quality customised customer care in real estate.
In a similar way to IoT solutions, AI can help real estate companies drive improved operational efficiencies for both facilities and building management. AI tools could help Dubai's real estate companies manage large numbers of properties effectively and technology-savvy real estate companies will be leveraging digital technologies to give themselves a competitive edge: as in almost every other industry today, it is customer experience that is driving success and satisfaction, and real estate will be no different.
Smart technologies are already present for Dubai residents in the shape of things like smart parking in housing developments, but as we move forward I expect to see real estate developers get fully on board with Dubai's smart cities agenda and begin mining the value in managing the user experience. To do this they will also need to understand the financial potential of being a service broker, so that moving forward they start issuing tenders to procure the right IT platforms that enable them to work in that capacity. By improving customer service for tenants, reducing complaints and increasing resident satisfaction using digital technologies and smart city thinking, real estate developers will be able to disrupt their own market, transform themselves and thrive in Dubai's next era.
Spyros Salpeas is Head of Digital Innovation and Key Customer Programs MEA, Orange Business Services.