Our future is tech-driven. We’ve seen nearly every industry sector take on digital transformation and startups disrupt the markets with the power of emerging technologies. Technology clearly will continue to enable a wide variety of work process to become digitalised and made more efficient in the sense of cost-saving and time-saving. Meanwhile, as the lines between industries become increasingly blurred i.e. hospitality, real estate and consumer, the numbers of both local and international competitors are drastically increasing. Also considering, big industry players across workplace, hospitality and e-commerce continue to raise the bar, it becomes necessary for businesses of all sizes to eventually expand their range of products and services to provide more personalised customer experiences.
The good news is that the future of proptech includes sustainable innovation! Given tech like the Internet of Things (IoT), 5G, blockchain, artificial intelligence (AI), machine learning (ML), augmented reality (AR) and virtual reality (VR) already exist; we’re seeing great streams of innovation developing for proptech in the new year 2020.
About 1 in 3 industry leaders are purchasing technologies from third-party suppliers and around 1 in 4 either partnering or investing in proptech companies (PwC, Emerging Trends Europe survey 2020). We expect proptech investment activities to increase in the new year, so we’ve outlined for you some exciting proptech trends to look forward to!
(Venn diagram of PropTech industry sectors comparison)
Internet of Things (IoT) connecting more and more
It’s estimated that already worldwide around a billion of cellular IoT connection exist and could grow to over four billion by the of 2024 (projected by Ericsson)!
Leading example is Amazon. Out of its many different product ranges, the Alexa-enabled Echo device range has the most high-profile IoT products. Cyber Monday 2019 was a record-breaking weekend in sales for Amazon Devices, wherein the best-sellers “were the Echo Dot and Fire TV Stick 4K with Alexa Voice Remote“, adding millions of new sales to the 100 million+ sales of Alexa Devices.
As smart devices become integrated into everyday home life and increasingly more connectable devices become available, we’ll see more IoT devices become integrated into working life, as well as, lifestyle retail.
Mobility influencing future design in the Sharing Economy
The Sharing economy has experienced massive growths with the impressive rise of multinationals like Uber scaling car-ride sharing. This year we’ve seen dockless bicycle and e-scooter sharing startups scale up (e.g. Ofo, Lime, Mobike, Jump by Uber). The popularity of such ‘micro-mobility’ transport options are in part due to ‘go-green’ movements and desires for convenience. So, when it comes to city selection from a property investors’ perspective, transport connectivity is a key decision influencing factor because that’s what occupiers will be seeking. Potentially, building owners will seek to partner with ride-sharing companies and integrate ride-hailing apps in their proptech.
Back in the autumn, self-driving cars were tested in London and next year there are already plans for autonomous ride-sharing services to hit the streets. Autonomous vehicles will revolutionise transport and begin factoring into property development designs considering car parks and garages will become less relevant. Concierge services, designated loading docks and charging stations for electric, autonomous vehicles are just some of the facilities property and proptech developers will need to further accommodate.
In a sharing economy, we can also expect more car lots/parks to be repurposed into other types of spaces (as fewer vehicles are individually owned) such as compact flats, data centres, warehouses, venue hire, logistics hubs, gardens and green spaces. Meaning, flexible space booking management could expand outside the typical main rooms.
Prioritising social needs and ‘digital wellbeing’
There are a number of reasons why young adults are choosing coworking and coliving over property mortgages. Whether it be the ease of moving abroad, the increasing availability of flexible rental spaces or student loan debt influencing our decisions; each of us still have basic human needs including social – belonging, health and wellbeing, that will influence tech development and demand proptech to address.
Coliving and coworking spaces are taking up around cities all over the world, including London. These complexes are more commonly developed into mixed-use spaces to optimise on space and heighten proximity to a wide range of e.g. restaurants, offices, residential, retail and lifestyle studios all in one development. In these mixed-use developments, proptech will need to better connect these diverse offerings in order to provide a seamless tenant – ahem, more like we’ll be saying customer – experience.
So, providing flexible and affordable connected spaces is just a part of the satisfaction equation. Digitisation of work processes cannot dismiss social needs, meaning future proptech must further facilitate communication and transparency – ie. between landowners, building managers and occupants. It will also need to improve accessibility to wellbeing services and nuture a ‘communal tribe vibe’ – where occupiers can network with each other, share events and quickly get help on any problems.
That’s why community is a core aspect to Smart Spaces’ platform and one we’ll be further developing for smart buildings in the future. More and more you will see traditional real estate developers and service providers invest in app based solutions, for building users (members) to create profiles showing their interests and skills to help build community and mindfulness in their flexible workspace environment.
From another perspective, proptech will also need to address ‘digital wellbeing‘. Outlined by Google, technology often distracts us from the important parts of our lives which is why tech products should support users in finding a balance in usage behaviour. People appreciate tech that enables them to better focus their time and be productive when it counts, and then be able to unplug from it. It’s also important to minimise distractions from devices and be able to spend time socialising. It can be as simple as adding daily access limits or silent notification schedules to apps, or providing a visual dashboard of usage behaviour.
Real Estate as a Service (REaaS) / Property as a Service (PaaS) and Workplace as a Service (WaaS)
As we’ve mentioned, expectations for personalised experiences are becoming normalised. REaaS/PaaS and WaaS are using IoT among other proptech technologies to provide that. Tenants, occupants, occupiers, residents, renters etc. even visitors, are to be seen akin to customers and many already view property spaces as rentable services. Landowners turning a blind eye to software and Big Data trends will lose out. Consumer behaviour has shifted attraction towards flexibility with subscription-based models and ranges of add-on services proven successful in office property types; so we can expect this trend to permeate to all sectors/property types.
The UK retail sector has been struggling with sales sharply declining in the past year (in part due to eCommerce competitors taking over demand). November just became the fourth consecutive year UK retail sales have greatly decreased, forcing retail property owners, especially shopping centres to get creative with their strategies. It’s not enough to simply refurbish in hopes for capital values to increase. Repurposing shopping centres has been a growing trend, that makes sense to continue given the transformations of consumer behaviour that won’t be reverting.
Smart buildings and smart cities
Proptech enables buildings to become ‘smart’ – read more about what is a smart space? – and once cities are made up of smart buildings, they may become ‘smart cities’. But of course, a smart city will require more than just smart buildings. Infrastructure must be transformed and governments should offer new incentives, policies and change regulations.
(22 Bishopsgate smart building under development ©David Holt)
While there have been smart city projects started years ago, it’s only with recent technological advances such as 5G, edge computing, AI, ML and blockchain security designs that smart cities can be fully envisioned (read more about how 5g will lead to smarter cities here and big data security here). Proptech has a wide range of big data tools and IoT integrations to further develop smart spaces that connect with all the areas a smart city would need in the future e.g. smart: living, workforce, energy, waste management, metrics, equipment, people, mobility, governance, economy and public safety.
The top 15 ranking ‘Smart city governments’ according to the Eden Strategy Institute’s 2018/2019 study are: London, Singapore, Seoul, New York, Helsinki, Montreal, Boston, Melbourne, Barcelona, Shanghai, San Fransico, Vienna, Amsterdam, Shenzhen and Stockholm.
Recently, Stockholm was awarded Smart City of 2019 by the Smart City Expo World Congress, for providing locals with exceptionally high qualities of life and business environments with a smart city strategy that is socially, as well as, ecologically and economically sustainable.
Voice AI and robot assistants
Voice AI has come a long way but still has a long way to go before it’s a more useful option for consumers since Natural Language Processing (NPL) is extremely complex to map and compute. Whilst different organisations and governments are developing AI strategies (also mentioned before voice assistants uptake is in a steep upward trend), voice AI may find it’s way into more proptech next year but it may be a couple more years until it becomes a first-choice engagement tool. There is also the issue of figuring out how to get empathy in AI dialogue and make it more human-like. In the meantime, proptech developers should keep in mind that voice-first apps are prospects of the future.
There’s been a lot of buzz around robots taking over millions of jobs. While we cannot predict the exact amount of time it will take to transition and integrate robotics into the majority of our workforces, we can see how more robots will assist our workforces in 2020. In fact, we’ve recently found a robot integrated with front-of-house staff in a smart building (at One Hyde Park Hayes, London) by greeting people and providing visitor info among many other capabilities.
Fog computing, edge computing and security priorities
Theories have been realised and we’re seeing a shift from centralised cloud computing to decentralised cloud-based orchestration (more about the benefits of cloud-based orchestration here). Fog and edge computing aim to reduce network latency issues, simplify IoT infrastructure and isolate data to improve security and privacy. Data analytics, apps and management can be decentralised in a network and offers a solution for delivering holistic intelligence.
According to one of the IDC’s studies, about 45% of all IoT device-generated data will be stored, processed, analysed and acted upon at ‘the edge’ of a network by 2020.
Opportunity to reduce latency whilst drastically improving connection speed, reliability, levels of individual control and scalability mean 5G will be greatly embraced for both private and commercial use. That is, once 5G network infrastructure is built across cities. There have been rollout delays for some due to local authorities lacking in preparation and political issues. However, most broadband providers are expected to get on track will deploying throughout larger cities first and the outside areas in the new year. And from Erissson’s Mobility Report, 5G take-up will likely cover, by the end of 2025, around 65% of the world’s population. This means there will be new 5G devices on the market in the new year.
Concerns of Big Data privacy and security issues are rising, rightly so considering the rate at which things are becoming IoT. It’s crucial that our digital assets can be made private and secure. The possibility of a stranger being able to control private data or create some unwarranted damage via IoT devices could be devasting for businesses.
A major issue causing vulnerability is centralisation of databases, which is why trends are shifting to decentralised networks like blockchain has proven to have immutable, transparent and reliable qualities. Our assets could be better encrypted by networks using a blockchain cryptographic security framework in the future. Additionally, a record of any transactions or updates would be immediately notified to and made available to peers in the network. That means we could allow many IoT devices to function as we want, share data with others for money or services, and make updates on the devices securely with the ability to monitor user access.
Read more about what blockchain is and how it could make AI and ML technologies more secure here.
(Illustration of blockchain)
Digital twins – BIMs, AR, VR and mixed-reality apps
Building Information Modelling (BIM) has been trending in the construction sector worldwide, within the past few years the takeup of this technology has increased from about 29% to 64% (according to a GlobalData study). A BIM is essentially a digital 3D replica of a building, also known as a ‘digital twin’. The aviation sector regularly uses digital twins of aircrafts so that operators on the ground can oversee the performance of the aircraft during flight in real-time. If anything malfunctions, they can immediately diagnose the issue and assist the pilots. Similarly, the benefits of using a digital twin for buildings, means constructors and engineers can better project plan and target the sources of any issues. Building owners can also use real-time analytics to more accurately assess how to better improve e.g. energy performance rating and simulate any changes on the model before actioning on the physical building. Read more about the benefits of digital twins for smart buildings here.
The EU BIM Task Group initialised implementation in some EU countries for BIMs to be a pre-requisite for public sector tenders. Non-EU countries are also implementing regulations, for example, their Universidad de Chile established a BIM monitor and reported 69% of Chilean construction companies using BIMs this year. While some countries like Switzerland may have smaller public-sector projects and less obligation to adopt this technology, we can still see many other countries in the new year finding more reasons to use BIM.
The UK has set a deadline for requirements in 2025 for BIM methodologies, meaning we still have several years until BIM can be fully standardised for highly technical sectors like manufacturing; because any inaccuracies, duplications or security risks could be harmful to the public.
AR, VR and mixed reality
AR and VR are wearable technologies will continue to be popular as many new mixed-reality apps are expected to be created. HoloLens 2 by Microsoft, is an example of mixed reality smartglasses released earlier this year that can project 3D holograms in the user’s visual field. It uses iris recognition security and has similar capabilities to smartphones – including wireless WiFi and cloud connectivity, compatibility with all kinds of apps, interactive touch and AI voice assistant. With the ability to accurately visualise floorplans, use various mixed reality apps and communicate more informed decisions, this futuristic technology will change the way we design our spaces. Flexibility to develop mixed reality apps for it via Microsoft Azure, Unity, Unreal, Vuforia and other platforms opens up possibilities for sustainable innovation.
(Image © Microsoft 2019)
Government regulations for PropTech
Growth of proptech will attract more attention from government bodies in the future to merit specific use of data, encourage sustainability and renewable energy proptech, and change legislation on crime prevention and security e.g. implementing strict identity checks to combat fraud.
In the UK, there are some good efforts already in place including: the Department for BEIS, Geospatial Commission, UK BIM Programme, Government Digital Services, the Government Soft Landings policy, Innovate UK, UK Research and Innovation, the UK AI Sector Deal, London Datastore, Future Cities Catapult, the Transforming Cities Fund, Geovation, and updated RICS Data Standards.