How technology is shaping the real estate industry

Digital disruption poses a threat to real estate which, could result in various forms of the industry becoming obsolete. We think the biggest impact on the real estate world will be seen in retail. Department stores have felt the pinch acutely as seen with Stuttafords which will inevitably become a a future case study –like Kodak, a company that missed the signs of digital disruption to come during its time.

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Commercial Real ESTATE

Digital disruption poses a threat to real estate which, could result in various forms of the industry becoming obsolete. We think the biggest impact on the real estate world will be seen in retail. Department stores have felt the pinch acutely as seen with Stuttafords which will inevitably become a a future case study –like Kodak, a company that missed the signs of digital disruption to come during its time.

Large urban shopping centres were previously spaces for valuable real estate however this could change as the smartphone removes the shackles that bind consumers to their desks. The impact of the relationship between virtual and physical infrastructure is what we are seeing today.

Brick and motar locations will come under severe pressure due to a digital wave that is changing the landscape of industries globally. Warehousing will become the asset of choice as physical stores slowly migrate to a virtual infrastructure. Zando ,Spree and Takealot are just a few of the local players that are leveraging technology to satisfy customer needs. This does not signal the end of physical retail locations but triggers a demand for an alternative option – different from the traditional shopping mall we all know and love.

rESIDENTIAL REAL ESTATE

The residential real estate market is the manifestation of how we choose to live. A prolific increase in mixed use precincts, which include living spaces that are closer to amenities, is shaping how we are evolving in our day-to-day lives. People are spending more time in coffee shops, where they can simultaneously work and use technology to grow their business, meet new people or old friends. Food is prepared less at home but rather ordered through various smartphone apps. A booking at a favourite restaurant is at a click of a button on a smartphone.

City living becomes attractive as there is shared usage of resources. There is no need to own a car as there are apps that allows you to call a driver and deliver you to your destination. Urban living has become a massive attraction due to the various technological improvements, especially the convenience it comes with. Rapid urbanization triggered by technological advancements will continue to create development investment opportunities through developing small pieces of land into mixed precincts.

HOTEL REAL ESTATE

Emphasis on unilateral and shared spaces paired with a reality of telecommuting has advanced how hotel investors think about their assets. Online reviews now determine the potential customer base. Customer centricity is in the spot light through various reviews accessible instantaneously. Investors cannot hide behind slogans they don’t practice as their brands are heavily scrutinised by any customer that walks through their doors. Crowed shared information on various social media platforms cannot only be to the disadvantage of a hotel owner but the information that is shared by the online community can provide hotel owners with real time, up to date information of their customer preferences ,experiences and trends . This, in turn, creates proactive management of hotels rather than reactive.

by Harry Mathope

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