Modern technologies are revolutionizing the real estate sector

The real estate sector is changing. Ongoing digitalization not only affects properties themselves but also the way they are managed as well as working methods in the real estate sector. As supply grows, the needs of tenants are likewise changing.

June 7, 2019

Artificial intelligence, smart homes, and the Internet of Things are just three of the many digital topics that provoke discussion on a regular basis. This is not surprising, given that the digital transformation promises the real estate industry not only efficiency gains but also improved information flows, transparency, and therefore direct added value. This will benefit tenants, as well as asset managers and investors.

The real estate sector is only at the start of its journey to creating the fully connected, smart property. Nonetheless, all players agree that digitalization will change the real estate sector as a whole and enhance its value in the long term.

Specialized "PropTechs" have sprung up in recent years, providing digitally based products and services aimed at various parts of the real estate value chain. By applying the latest information and communication technology, these operators have the potential to revolutionize processes or entire business ideas.

Although only a few individual properties are fully connected at the moment, the innovative solutions provided by PropTechs have already led to a rethink within the industry. Initially seen as technical gimmicks, digital services are now considered a key factor for long-term property management, high rental rates, and the well-being of tenants and users.

Real estate sector in transition

As a result of various technological developments, the construction and real estate sectors are set to change dramatically over the coming years.

Experts agree that 3D printing, for example, will become massively more important. Should the technology become established it could revolutionize the market – in a sustainable way. 3D printing enables the use of liquid concrete as well as materials such as building rubble and industrial waste. This method of construction produces less waste, thus saving on materials and benefiting the environment.

Far-reaching changes are also in store for the asset, property, and facility management industry. For example, the fact that it is already possible to take virtual tours of properties is resulting in fewer on-site appointments, and is therefore affecting the rental process across all types of use. Demand for high-quality videos of attractive show homes is growing at the same time. With building data now available at any time at the touch of a button, data analysis specialists are also sought-after. The real estate sector is under pressure to invest in appropriate training and development programs in order to provide the services today's users expect.

Future living: smart and flexible

The speed at which clients and tenants accept new technology will be crucial to the process of digitalization in the real estate sector. This largely depends on how user-friendly the new tools are, and whether added value is immediately identifiable: Fact is, having to search through the display at the entrance to an apartment block to find the person you are looking for can be a laborious process compared with the familiar door bell button. Electronic lock systems that enable access to properties and premises by smartphone are another new development. Data protection is an additional prerequisite for the acceptance of new technologies. Only if this is assured without exception will tenants and investors have faith in the new services.

Seamless WLAN and mobile networks are required if smart-home applications are to function effectively. The latter include the 5G network technology currently being launched by mobile phone providers with bandwidths similar to fiber optic networks. The high availability of such networks ensures that all applications can receive and send data around the clock and in real time. This can be used to log or individually manage the use of devices such as smoke detectors, surveillance cameras, boiler thermostats, and light switches, for example. This service not only provides tenants with a high level of added value in terms of security and comfort but can also reduce heating costs, for example, through optimum adjustment of ambient temperature. In addition to numerous other applications, the new technology creates a safer living environment for older people. For instance, floor sensors can trigger an alarm if a person falls and is unable to get up again single-handedly.

Work 4.0: Companies are using new concepts

But digitalization is not only changing the way we live: The places and ways in which we work are also in transition. Whether it's an office building, hotel, shopping center, or logistics center – increasingly intelligent solutions are in demand across the board. These include real-time management of ventilation, lighting, and heating, as well as the provision of "space-as-a-service" concepts. The latter serve the growing need for flexible, optimally designed spatial concepts. Solutions that combine space and services are likewise very popular.

The impact of digital transformation is particularly evident in the case of logistics properties. The rapid expansion of e-commerce, growth in automation technologies, and desire for increasingly short delivery times require small-scale logistics hubs boasting excellent transport links. Besides location, the connectivity and automation of logistics processing play major roles. Intelligent combination of devices not only enables energy efficiency to be increased but also speeds up order processing.

Digital transformation is an opportunity

Had it not been for the invention of the steam engine, mass production, or the computer as an aid to life and business, we would be living in an entirely different world today. Digitalization – the fourth industrial revolution – is changing our economy and society at unprecedented speed. The real estate sector is not immune. By digitalizing its offer, it can make a valuable contribution to economic, social, and environmental sustainability.
This is contingent upon the real estate sector anticipating digitalization on a cross-industry, cross-discipline basis. The demand for "digital" real estate is rising in tandem. At the same time, it is essential for all stakeholders to buy into this future. This can be achieved if we adhere to the principle that technology needs to serve people – and not the other way around.


Blockchain, internet of things and lifestyle
Internet of Things

The Internet of Things (IoT) enables communication between smart devices via the internet. Smart devices are generally equipped with sensors. This enables data and information to be exchanged and transactions to be initiated – with no human interaction whatsoever.


Digitalization influences the world of work and therefore concepts for the rental of office space. Working hours and places of work are becoming more flexible. Businesses are looking for variable rental conditions that enable them to quickly adjust to their needs. Here, the real estate industry is under pressure to offer space-as-a-service concepts, such as co-working options with flexible space expansion, the combination of space and services, as well as "plug-and-work" office solutions.


PropTech combines real estate management services and technology, and is emblematic of modern technological developments in the real estate sector. Most solutions developed by start-ups are designed for the needs of other businesses (B2B) or end-consumers (B2C). They are usually aimed at efficiency-increasing measures for existing processes or the adoption or optimization of products, processes, or entire business ideas using the latest information and communication technology.

Big data

Big data refers to data volumes that are too large and complex for evaluation using conventional data processing methods. The growing number of networked sensors and devices in real estate is creating a gigantic amount of data worldwide. Evaluating this in a way that makes sense is a challenge. Too little use continues to be made of the potential of big data for the real estate industry. The analysis of client data facilitates enhanced customer service, for example. At market level, big data applications can be used to obtain information about buying decisions and risk assessments.

Artificial intelligence

Artificial intelligence (AI) is the simulation of human thought processes and therefore the automation of human intelligence using machines. AI includes methods of solving complex tasks using a computer. Via certain algorithms and artificially generated artifacts, machines learn on a continuous basis. AI applications include expert systems, speech recognition, and machine vision. In the real estate sector, AI can be used to analyze personal data in order to provide clients with customized services. Beause AI evaluates extensive data, it can help investment managers determine which properties fit into which fund, for example.

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