Mornings are different for Sarah. She has been able to make her life far more convenient than a lot of us, thanks to her interconnected world. She does not worry about turning off the switches before she leaves home. As she gets into her car, the Wi-Fi on her phone is turned off automatically, she gets a report on her screen with all her car health statistics. And as she reaches office, her Wi-Fi is turned on automatically and she gets plugged right back to start her day. It does not stop there for Sarah or for any of us anymore. Internet of Things (IoT) is now more than just a buzzword.
For the real estate industry, which relies heavily on raw materials like cement, concrete, steel, IoT may not seem very relevant to start with. But a little closer view reveals that Internet of Things (IoT) is radically changing the way things are done in the industry, with changing customer preferences driving demand and transactions. In the near future, businesses will see IoT playing an increasingly important role.
What does IoT mean for the Real Estate Industry?
Disruptive innovations in the technology space are fueling the growth of smart real estate space. There is a huge advancement in devices and sensors that are being used to capture data. This is enabling commercial real estate providers to create differentiated value to customers by providing smart solutions to control various systems at homes, offices and the spaces they frequent.
A major shift has been observed in real estate consumer preferences as we see the transfer of decision making power from baby boomers to the millennials. This Gen Y, driven by a rent-by-choice culture, is seeking investment opportunities in real estate early, driving technology initiatives in the space.
IoT today is a part of homes, work and shopping places, parking lots, etc. Capturing data from sensors in the real estate space, combined with the power of analytics, gives IoT the potential to offer insights that will change the way we live.
IoT makes spaces smart
Customers are looking for more automated solutions to perform their daily chores that make lives easier. For instance, a smart HVAC system at home will sense the ambient temperature and the tenant’s schedule and automatically start before the tenant enters the home. This will help in enhancing the user experience and also help in efficient system operation, thus reaping better economic benefits.
Similarly, a smart security system will help ensure safety by sensing and analyzing regular activities in the house and notify the user of any changes or irregularities.
IoT has a significant impact on energy efficiency
IoT plays a key role in capturing the energy consumption pattern of systems and can initiate predictive maintenance to ensure smooth operations. It can be implemented to automate building maintenance services, enabling users to track operations of machines like elevator, HVAC system and lighting system by collecting data like operating time, idle time, and maintenance cycle.
Along with the analytics, devices and sensors will record the pattern of operation and notify the need of maintenance whenever required, either in case of irregularity or in case of predictive maintenance. This can be directly translated into tangible benefits like operational cost reduction and intangible benefits like smooth operations.
IoT is helping in making decisions faster
Retailers are seeking smart spaces to capture the flow of customers. This will help understand the areas where customers spend the most time, which parts of the store get highest attention etc. Better understanding of the operations will help the retailer to make decisions regarding design of the store as well as merchandising.
Manufacturers and warehouse operators are also excited about the concept of smart workspace, which will help them to monitor the supply chain with closer look into the inventory levels, people and machine performance on the floor.
IoT is also impacting the individual home buyers with quickly adapting beacon technology. Houses for sale can now have beacons that are capable of sending push notifications to potential buyers, and along with it, the specifications of the property that enables buyers to make decisions quicker.
IoT will soon be the only way forward
Today, the lack of interoperability of devices is not allowing businesses to tap the true potential of IoT. To achieve interoperability, there is a need for integration across various systems, devices and vendors.
There could be a threat of invading privacy due to the user data, which might lead to denial from tenants to implement IoT solutions. Commercial Real Estate providers should plan to mitigate the risk with appropriate measures.
However IoT will seek more lure in the real estate value chain and will need huge direct and indirect investments. The Real Estate industry should plan to incorporate IoT which will drive the way businesses will operate in the future.