Internet of Things (IoT as it is commonly referred to) is a construct where everyday objects are interconnected via the internet and communicating when necessary. Running out of eggs? Your trusted refrigerator sends a message to your favorite grocery store with the stock quantity needed and it gets delivered to your doorstep. Feeling sleepy at your home office desk? “Tell” your coffee machine via your handset and your coffee is ready without you even pressing a button on the coffee machine. Wearing a purple shirt? Your box of mascara will suggest the color palette go with, for the day.
The underlying take-away from these examples is that usability of technology will be interwoven in the product itself making us less reliant on static interfaces such as a PC and mobiles. The Global Standards Initiative on Internet of Things (IoT-GSI) has defined IoT as “the infrastructure of the information society.”
With such smart applications making their way into our everyday lives, little wonder then that the IoT is fast catching up with a technological slowcoach – real estate. Over the years, smart developers have harnessed technology to crunch time to delivery for their project and in the process, providing that wow factor to their customers/tenants. A large part of the IoT’s proliferation in real estate is happening in the commercial office space. A plethora of high-end grade A office buildings are sporting devices and sensors connecting the real estate asset with the people working inside it.
IoT apps related to real estate makes the life easy for office goers and those living in smart and connected houses. A lot of decisions are made on the fly basis the app’s suggestions. The more the apps are used, the better it becomes for the developers as they become privy to rich data that helps them fine tune their product/service.
In offices, there are smart sensors that are controlling the air conditioner depending on the number of workers per square feet. Such application of smart sensors has led to significant savings in energy bills for corporates. The same application also controls the lighting and humidity within the building – thereby, conserving energy. RFID sensors keep track of vehicles being parked in the premises giving real-time availability of parking slots. Putting together these two examples of sensors calculating workers per square feet and total parking slots occupied in a building, data analytics and insights from such numbers can be shared with, e.g., a quick serve restaurant or a pub within the vicinity of the building. Such businesses can assess the total number of males and/or females attending office in that building on that day and customize their offer accordingly – “buy one get one pizza free offer between 6 pm and 8 pm” or “Women’s only evening – happy hours between 6 pm and 10 pm”. A taxi aggregator may position their vehicles closer to the quick serve restaurant or bar and offer rides or pooled rides on such evenings. The scope of interconnectedness is enhanced with data sharing and aggregation thereby, improving the whole experience of the workers in a smart building.
It all started with Building Management System (BMS) that enabled Facilities Managers to harness the technology and afford the tenants with considerable savings in their energy bills brought about by operational efficiencies. IoT took the concept to another level providing higher cost savings and revenue benefits.
In the coming years, REITs will be a reality in the Indian real estate community. Such initiatives backed by nifty apps and incisive data analytics will make risk assessment and valuation of a real estate asset a smoother affair for the promoters of REITs.
Furthermore, from the Facilities Managers’ point of view of commercial real estate, their customer satisfaction score will improve significantly if they enhance the profile of the building to enable efficiencies and cost savings for the tenants. Corporate real estate executives, while scouting for their next office address when their lease is expiring, or they are expanding their operations, will surely prefer those offices that enable them to work in such interconnected environment that will help run their businesses smoothly. Also, corporates that are housed in such smart buildings will be able to attract better talent much more quickly than their peers. Real estate developers are already recording and assimilating such shift in preferences. Accordingly, they include infrastructure for IoT at the design stage itself, thus having a leg-up over their competition.
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This shift in the mindset of real estate owners in bringing about interconnected real estate assets on the back of IoT is fuelled mainly by the penetration of smartphones and tech savvy millennials entering the workforce. Also, the Telecom Ministry’s recent push for an increase in the minimum speed for data helps all the stakeholders, especially the IoT app developers and their consumers.
All stakeholders – consumers of IoT, app developers, real estate owners, corporates, etc. – are set to capture maximum value out of the IoT in real estate in the coming years. A lot of disruptions are expected in the way real estate business is conducted which will create tremendous value for all concerned.