Impact of Technology on Commercial Real Estate

All the factors of Real Estate- land, labor and capital are influenced by technology. There are five key manifestations of technology that have changed the face of the commercial Real Estate market.

Improved Consumer Goods

The fast, better, and cheaper production of consumer goods has immensely changed the lifestyle and purchasing habits of people. Whether they are durables like mobile phones, automobiles, furniture and electronic goods or FMCGs like eatables and cosmetics, the dependency of people on all of them has created demand for new industries, dealers, retail markets, office spaces, and other auxiliary units. The urbanization has further fuelled the demand quotient of this economic model, resulting in the need for more commercial real estate infrastructure.

Better Transportation

As the cities grow, trade practices flow. Trade of any kind is directly dependent on transportation. It will not be an exaggeration to say that transportation technology shapes the boundaries of a city. Trade moves on need based inter-dependence- manufacturers need suppliers, merchants need customers and employers need employees. These interdependent factors can be brought closer only through better transportation infrastructure. Roads, lanes, highways, filling stations, maintenance facilities etc. are its integral parts.

Upgraded Construction Technology

The significant technological manifestations in the construction sector have been the introduction of aluminum shuttering, pre-fabricated construction, drywall systems, etc. These technologies not only save costs but also reduce the time of construction. Changing needs of the end users have also transformed the construction sector, particularly commercial real estate construction. Now the demand for flexible and co-working spaces is on the rise. The speed at which these places can be constructed and the flexibility with which they can be used have made the commercial real estate sector more efficient.

Financial Engineering

For every development work, whether it is infrastructure, industrial or commercial real estate, a constant inflow of funds is the key to success. Till recent past, raising of funds was never considered an easy task for developers. Loans from banks or private financers was the only option available for them. However, technological advancements and financial engineering paved way for many innovative fundraising schemes like IPOs, Real Estate Investment Trusts, Fractional Ownership Platforms and FDI. In September 2023 only, the State Bank of India announced that it raised 10,000 crore through Infrastructure Bonds. These financial instruments have been an important technological change in the real estate market.

Internet-Based Services and Applications

The internet serves the real estate in four different ways:

(a) Provides data and online information about the market, material/commodity prices, Government notifications, socio-economic conditions, competitors etc. These information help in decision making.

(b) Creates analytical studies. Helps in planning, management of statistics, tax, accounting etc.

(c) Facilitates online transactions. Receiving or sending payments through RTGS, NEFT etc, have saved a great amount of man-power and time.

(d) Making and editing of technical drawings, planning the propagation of ongoing or future projects, etc. have now become a child’s play.

Many profit-making real estate firms are not necessarily large, multi-faceted giants but certainly they are technology-oriented niche players.

For sale/purchase/leasing of properties contact Gitin Suri @ 9810150047