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Long-established real estate business models are at an early stage of being disrupted by digital technologies. We have barely scratched the surface in realising the economic and environmental gains that will be possible in the smart era, but, in time, digital advances will redefine the routes to securing profitable growth from commercial buildings, and to generating value from building usage. All these changes need to be understood by contractors working in commercial real estate as much as by developers themselves.
Trends in digital technology – such as the mainstream adoption of cloud, the advancement of the internet of things (IoT), and an explosion in real-time data – are transforming the way that companies use office and retail space, and the value they can generate from the built environment. As new ways of working become more and more mainstream, investors and developers need to rethink traditional ways of delivering and managing space, and look to new revenue streams such as delivering technology requirements and hospitality services, to sit alongside conventional rental income streams.
For example, as the built environment becomes embedded with sensors – and more connected devices are used inside buildings – it creates opportunities for new data-driven revenue models. In large retail centres, for instance, it is increasingly possible to capture and integrate data about where, when and how consumers shop, enabling retailers to tailor advertising, opening hours and store location, among other things.
While in office buildings, gaining access to data from different smart systems such as heating, lighting and fire safety, along with data captured by other connected devices could be of huge value to an insurer seeking to more accurately calculate and price risk.
New revenue models are not the only source of value. By better understanding how and when they are using their workspace, companies can reduce energy costs and cut down on surplus floor space. In addition, mapping productivity data against environmental conditions – such as temperature, light intensity and air quality – can drive a more productive, healthier workforce.
The race to achieve these competitive advantages has profound implications for all industries involved in this sector – including the contractors designing and building the smart buildings of the future. Five key trends for UK contractors to look out for would include:
Are you ready for Google the contractor?
This article was written by David Savage
For further information, please contact David Savage on +44 (0)1483 252615 to firstname.lastname@example.org