The global real estate industry is in a constant process of adapting to evolving market conditions, a changing regulatory framework, and a fast-growing technological landscape. The implementation of 5G technology, the adoption of a new business model, which involves the transformation of real estate companies from space suppliers to service providers, and the development of the virtual office are among the predictions from the Deloitte Real Estate Predictions 2021 study, based on data collected from more than 10 countries across the world. According to the study, which presents a set of 13 forecasts for the global real estate, digitalization is here to stay, and real estate investors or fund, assets and property managers can either embrace it or risk becoming marginalized within the market.
Regarding the adoption of 5G technology, which can allow all devices, buildings and cities to be connected to each other, enabling new and smarter ways of working, 2020 may have slowed down the process, but it has also highlighted the need for improved connectivity, greater network speed and wider bandwidth capacity to support digital transformation. On the other hand, although there are challenges in implementing 5G, the economic and social benefits will outweigh the costs and the real estate sector has the ”bandwidth” to reap significant benefits from its implementation, according to the study.
A new business model is emerging in the commercial sector – Real Estate-as-a-Service (REaaS) -, an innovation that is being enabled through digital transformation and the development of the smart buildings sector. According to the new concept, the importance of physical space is diminished in the favor of data set made available to the user, and services that enable work are taking the place of the traditional workspace. The ReaaS model benefits are not limited to the savings for the company that implements it, but also manifested by revenue generation, based on the outcome of improved experience and productivity of users.
“The way we work will be changing in the post-pandemic era. Although we are no longer strictly dependent on physical office, the need for co-working and social spaces has increased. Thus, the role of real estate evolves towards the creation of a habitat, a complex ecosystem where we spend time. All signs point to a future dominated by a hybrid way of working, in which employees benefit from more options and employers re-examine their needs for work space. Large companies around the world, but also medium and small companies, including in Romania, have already announced they are implementing a hybrid working system for the long term, so diversifying the supply of workspaces and providing technology that allows remote work become essential,” said Alexandra Smedoiu, Partner, Deloitte Romania, and Real Estate Industry Leader.
The year 2020 has witnessed the rise of the local community, a trend that looks set to stay, as people save commuting time and enjoy the chance to spend more time connected to their living area. This gives organizations the chance to reinvent the role of the office in a new model of real estate operation – the virtual office. The physical workspace will also be diversified to contain both a central hub and co-working spaces or smaller offices in suburban and regional areas. This will allow staff to work in the neighborhood, to experience a greater separation between work and personal life and to connect socially with colleagues, while avoiding long commutes.
The Deloitte Real Estate Predictions 2021 study analyzes the latest developments that influence the future of the global real estate market and offers a broad perspective on the labor market, sustainability, digitalization and innovation in the sector.