Owing to high competition, oversupply and tight margins, real estate developers in Asia-Pacific (APAC) are increasingly embracing new technologies, known as proptech, to better engage customers, offer additional services and differentiate from the competition, according to GlobalData.
The company forecasts the APAC real estate market to grow at 12.8% from 2017 to reach $2.54 trillion in 2022, riding on the back of the three largest markets by value — China, Japan and India.
Historically, property developers carried a strong brand, a track record and wielded significant influence in the decision making process. However, buyers are becoming better connected, doing their own research and connecting with peers before taking a decision.
In some cases, virtual, augmented and mixed reality technologies, coupled with powerful mobile apps with geolocation are allowing buyers to visit multiple homes in a day.
Dustin Kehoe, technology research director at GlobalData, noted that “developers are also turning to these digital technologies to rebalance the relationship between buyers and sellers. They want to fundamentally understand the buying cycle and reconnect with customers early on, and extend the relationship to potential buyers before, during and after a sale.”
In the smart home context, instead of building a home and just handing out a pair of keys upon signing a contract, developers are looking to incorporate extra features and capabilities such as controlling lights, alarming, environmental controls, lighting and multi-play entertainment systems to reflect personas and lifestyles.
Kehoe explained: “Home owners of new dwellings can expect state-of-art connected furnishings with modern appliances. They can also buy insurance and other micro-services from property owners and developers. By moving directly into the services industry, developers will be in competition to insurance brokers, but will have better means to offset margin pressure.”
In the commercial space, developers are taking on other responsibilities such as building energy use, equipment maintenance and management, water management, HVAC and lighting and space utilization through analytics. They are helping business owners and occupants gain visibility over disparate systems to improve energy efficiency.
In addition, large scale projects such as industrial parks or malls are expanding on the concept of smart services to include traffic lights and parking to alleviate congestion, street lamps and transit systems.
Kehoe added: “Over time, smart home and buildings will extend to other areas such as the testing and coordination of interconnection points (e.g., street lights with congestion; transit links to bus systems). Many smart cities in APAC will actually be created as a result of smaller, local developments. Smart cities will be driven from the bottom up in many markets.”