New "Normal" is a Myth
The future of real estate won't be the same. Crises have forced real estate leadership to address critical business concerns.
4 minutes to read
The lessons from the first half of 2020 were as valuable as they were painful. The combined effects of mitigating health risks, market lockdowns and demand shocks to the economy took its toll on real estate companies across all sectors. Property assets that involved high-levels of human density have been the hardest hit – malls, hospitality, student accommodations and dormitories.
Necessity dictated simplicity as organisations implemented measures to protect their workforce and discarded operational redundancies. Accelerated change management would best define the situation that business leaders are faced with, even as markets reopen with possible economic headwinds in the next 12 months.
While companies may have attained some level of success in coping with crises, a greater risk exists in thinking, or being satisfied with the current new norms. Strategic review process is needed to understand how real estate usage might change going forward. A business’ ability to weather tough times depends on how well it responds to immediate challenges —the decline in short-term cash flow and demand for space, as well as the uncertainty surrounding tenants’ ability to pay their bills. These behaviours forced upon the industry will likely alter the way consumers and businesses use and interact with real estate.
One thing is for sure: Real estate companies cannot afford to take a wait-and-see approach while there is still uncertainty in the market post-2020 and beyond.
Critical business concerns for real estate businesses to look at:-
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Building Enterprise Resilience
The survival of a business rests primarily on cost optimisation and the management of its people and supply chains.
Many real estate players struggled to adapt when the pandemic started. Traditional supply chains focused on efficiency fell apart in the face of demand shocks to the economy. Companies had to rework business models to manage disruptions, quickly upskill their workforce, and redeploy employees from functions that were rendered obsolete.
Property developers, for example, needed to move the focus of their supply chain beyond just cost efficiencies and take planned steps to add built-in contingencies, by constructing a flexible network of partners in manufacturing and supply.
Doing so involved making use of assembly nodes and the most of Industry 4.0 tools, to improve response times and optimise costs.
Achieving flexibility in supply chains invariably involves a greater sharing of knowledge and data among parties. With 5G technology, cloud-based applications and blockchain, developers and value-creators have the added assurance of sharing and receiving real-time data from partners and suppliers to better cope with supply and demand shocks while re- calibrating production capacities.
But there are costs to building enterprise resilience. The chief question facing real estate leaders is not whether they will invest in resiliency, but where it is needed and where the cost will pay off.
Turbocharged Automation, Digitisation and IoT
The real estate industry has been making strides towards digitising processes in creative ways. But the window of preparation for a digital and automated world is shrinking for real estate leaders. Technology enablement will be at the forefront of driving the real estate industry into the new age.
For example, with the rise of online transactions, companies need to operate on the assumption that the contactless economy will become a mainstay in every sector, even in the absence of pandemics and physical distancing measures. User expectations increase with every digital innovation, and service providers that offer differentiated experiences will stay ahead of the curve.
Businesses that marry a well-thought-out user experience across all its customer touchpoints will enjoy guaranteed results in the form of superior loyalty and the option to create new revenue opportunities via constant engagement with end-users.
In residential real estate, property developers and agency brokers continue to invest heavily into platforms that enable virtual experiences to help property purchasers find the right space for themselves – virtual open houses, augmented reality and personalised selling.
Project sales and marketing personnel are challenged with adopting automated, omnichannel, re-targeted ads to drive lead generation efforts and engage homebuyers.
Additionally, the need for virtual will fast-track the official regulation and adoption of digital signatures in all legal real estate documentation.
For retailers and mall operators affected by physical restrictions during market lockdowns, the creation of differentiated shopping experience gave rise to sales and marketing automation, as well as “retail digitainment”.
Asset management and building & facilities management necessitate a suite of digital products – mobile concierge services, virtual communities, contactless access for residents, guests and maintenance staff – to continue serving the needs of residents and tenants, regardless of social distancing measures.
The bigger opportunity, however, may be in B2B applications, especially in the Internet-of-Things (IoT). In supply chain and inventory management, data-sharing improves collaboration among manufacturers and suppliers, and the conduct of regular maintenance.
IoT allows companies to implement solutions remotely with reduced manpower and IoT allows companies to implement solutions remotely with reduced manpower and overheads, while granting analytics that provide deeper insights into customers and business capacities
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Our consultancy and advisory teams help enterprise leaders implement robust processes, resources and technology to strengthen business sustainability.
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