Technology has been a disruptive force in most industries and sectors over recent years. But in the real estate and construction (REC) sector, widespread adoption of new technologies has lagged somewhat. Indeed, the adoption of technology in property – or ‘Prop- Tech’ – has fallen a little short of its anticipated take-up. For example, in the U.S., the construction industry is several years behind many other industries with regards to technology with many companies still using manual systems for project planning and management. That’s why construction remains far behind in reaping the benefits of advanced technology.
However, 2017 is set to be the year the floodgates open for PropTech in the global REC sector, and we’ve looked at some key technologies you should be keeping an eye on in the industry this year.
THE WIDESPREAD USE OF DRONES
Drones have been in the news for various reasons recently – both good and bad. Thankfully, they are being put to good use in the construction industry and we’re seeing things get far more efficient on projects because of them. Drones not only save time (and therefore money!) but also improve safety for construction workers. A roof survey would normally involve human workers climbing onto the roof, which naturally involves considerable risk. By using drones, construction companies are able to bypass this risk, without losing much, if anything, in the way of accuracy.
For this reason, we are now seeing a wider adoption of drones by construction companies. However, the popularity of this technology has had the knock-on effect of bringing in increased regulation: aviation authorities around the world have introduced regulations for drones because of perceived privacy and security concerns, with many countries now demanding licenses or permits to use drones for certain activities or around important landmarks.
VIRTUAL REALITY – FROM GIMMICK TO LEGITIMATE TOOL
The use of virtual reality (VR) in property is already a $1 billion global industry and Goldman Sachs estimates that it is set to treble by 2020. VR has its obvious uses in the real estate sector: for example, VR is used for sales and marketing in the prime residential market, where investors often live miles away from the properties they want to view.
VR is also viewed as the next phase of Building Information Modeling (BIM), and as an enhancement to computer-aided design (CAD): developers can use VR to create more realistic and detailed renderings, which are now transitioning into virtual reality walkthroughs.
CYBER ATTACKS DRIVE INTEREST IN SECURITY
In construction, cybersecurity issues are only now making an impression but in real estate, it is a real issue, especially as buildings become increasingly “smart” and therefore vulnerable. Thanks to the Internet of Things, everything down to your Christmas tree lights can now be controlled electronically; thus, buildings are becoming the new target of cyber attacks.
The use of ransomware is increasing and becoming more targeted to property. In recent years, it was claimed hackers stole the blueprints to Australia’s secret service agency HQ, presenting obvious terrorist threat concerns. It is therefore understandable that landlords and building owners would be concerned for the security of their assets, and must work with cybersecurity experts to protect their business. Alex Iacobelli, Assurance Partner in the Los Angeles office said “as the industry becomes virtually paperlessand business processes become more automated, cybersecurity will need to be integrated into the Company’s accounting and financial information systems infrastructure. Firms must also integrate cybersecurity, when training their personnel, as they are likely the last line of defense for safeguarding the Company’s assets and information.”
Given the REC industry’s poor track record on innovation and the adoption of new technologies, tools and approaches, governments, developers and deliverers need to invest collectively to achieve these shared goals and future-proof the industry. In order to achieve this, firms need to develop digital road maps, appoint dedicated staff to think boldly about the digital agenda and partner with technology firms.
This is the digital age of collaboration, and the industry will soon come to realize that digital tools can be more powerful than the ones in a rusty toolbox. We all need to embrace this catalyst for change to attract a new generation of talent.
Ian Shapiro is a partner and co-leader of BDO’s Real Estate and Construction practice.
This article originally appeared on the BDO Global Real Estate & Construction blog.