Emerging technologies such as Virtual Reality, Artificial Intelligence and Blockchain will optimise the efficient use of real estate, transforming business models and disrupting those that are unable to keep pace with the changes, according to new research supported by the European Public Real Estate Association (EPRA).
‘The Impact of Emerging Technologies on the European Listed Real Estate’ report, compiled by the RealFoundations consultancy and backed by EPRA, focuses on what is likely to affect the real estate market by 2025.
'These technologies are likely to have a disruptive impact on real estate, both directly and indirectly, by changing the way property assets are delivered, acquired and maintained as well as by altering the underlying level and nature of demand for bricks and mortar,' said Irina Lenchuk, consultant at RealFoundations who compiled the study. 'They may also affect asset values by introducing new variables that modify the appeal a building has and by challenging traditional income streams.'
RealFoundations conducted in-depth interviews with 10 leading authorities on emerging technologies, including experts on their application in real estate markets. The analysis considered the impact of Artificial Intelligence; Blockchain; The Internet of Things; 3D Printing and Virtual, Augmented and Mixed Realities.
Demand for collaborative working space set to increase
'What tenants expect from their office space will change as jobs and working practices evolve,' the report concludes. 'It is likely that demand for collaborative and co-working space will increase, while occupiers will demand greater connectivity and personalisation. Tenants will expect greater flexibility in their lease terms. Technology will make it easier to forecast occupancy and space usage so that they can be optimised.'
In terms of retail, 'physical and online retailing will become integral parts of the same business as bricks and mortar retailers build a stronger online presence and e-commerce leaders open stores. Either channel has advantages for retailers, which should seek to balance and maximise the mix in their platforms. New technologies will provide opportunities to enhance the online retail experience and speed up the delivery process, while physical retail space will serve increasingly to entertain shoppers as well as enhance the experience, display and exchange of a product or brand.'
The report also suggests that industrial has an important relationship with proptech drivers. 'Emerging technologies will increase demand for high-tech industrial real estate (data centres, online distribution hubs, specialised logistics warehousing) to support digital infrastructure and technology businesses. Such facilities face increasingly sophisticated requirements from occupiers,' it noted.
'RealFoundations comprehensive report provides a timely roadmap for listed real estate companies assessing how they navigate the fast-developing world of emerging technologies and their potentially profound impact on our markets,' concluded Dominique Moerenhout, CEO of EPRA.