Cars, telephones, personal computers: when we buy one of these everyday products, our expectations regarding levels of innovation compared to the models we already have are very high. Take cars, for instance, for which an emphasis on technological innovations is more heavily stated than traditional features in advertising and media coverage. Large companies know that a technological approach is popular, so they create ever more refined products that stimulate demand.
By contrast, the same discussion does not take place when we buy a property. In real estate, the demand for innovation from consumers is almost non-existent and the market reflects this in the language it uses to market its products. And yet, the size and nature of the real estate sector suggest that it should be the first to ride the wave of technological evolution.
“Is today’s real estate industry able to offer innovative products capable of generating expectations similar to those that accompany the launch of smartphones and electric vehicles? The answer is yes.”
In the residential sector alone, worldwide annual turnover exceeds 3.5 trillion dollars, with more than 23 million new housing units being built, representing a market almost twice the size of that of the automotive industry.
Should we look at Italy, between investments in construction and spending on rents and brokerage services, real estate represents about one fifth of Italian GDP, with real estate investments making up about 60% of the total assets of families (according to Bank of Italy data). In addition, a third of bank loans are either granted to families as mortgages or are loans to real estate companies.
Technological innovation could also help the industry overcome the crisis faced in recent years: between 2009 and 2011 in Italy, about 7,500 real estate companies have started bankruptcy proceedings. This represents roughly 23% of total bankruptcies.
Is today’s real estate industry able to offer innovative products capable of generating expectations similar to those that accompany the launch of smartphones and electric vehicles? The answer is yes.
Businesses specialising in research and development of innovative solutions and ways to integrate them into different types of real estate projects are evolving. The solutions, commonly classified under the smart city heading, are already being used to improve the quality of neighbourhoods, condominiums and homes.
If more prominent players built them into the products they offer, then the customer-facing aspect of the industry could be revolutionized and be translated into a greater and more well-informed appetite for smart districts, smart buildings and smart homes.
As it stands, we are on the cusp of an extraordinary opportunity to put this idea into practice and buyers and tenants are beginning to respond well to companies acknowledging it. Large global entities have already found this to be true. Amazon and Ikea, for example, are entering the real estate market by proposing prototypes of smart homes.
Planet Smart City is unique because we offer smart city solutions in the context of affordable housing. Often seen as the preserve of the wealthy, we prove that innovative solutions can be integrated into large-scale lower-cost real estate projects with the result of happier residents who benefit from the best that cutting-edge ideas of this kind can offer.
We have built our manifesto on the premise that the intrinsic advantages that smart solutions, including services, can provide to a community and that theyshould be made available to everyone, regardless of income level.
“No solution can improve everyday life in isolation: it is necessary to integrate them into a system, which implies the need to radically change the way we design and build.”
The variety of smart solutions available now – and in development for the immediate and more long-term future – is diverse and wide ranging: free wi-fi, recharging stations for electric cars, smart meters, smart lighting, facial recognition cameras, smart locks, sensors, smart appliances, voice-activated assistants, super-fast internet and, more generally, the idea of an Internet of Things. Planet’s Competence Centre in Turin has already identified over two hundred smart solutions and is already integrating them into newly-constructed developments as well as urban regeneration projects, in Italy and abroad.
No solution can improve everyday life in isolation: it is necessary to integrate them into a system, which implies the need to radically change the way we design and build. Real estate operators therefore need to use a research-based approach when choosing solutions and formulate intuitive ways for customers to access them – for example, through digital platforms and apps.
The outcome of this evolution in real estate is not only an improvement in residents’ quality of life and increased environmental sustainability, generated by a reduction in energy consumption, for instance, but also net benefits for those who have to sell and manage homes, such as asset holders and construction companies. These innovations – in fact, even the most ambitious ones – can be quickly repaid through revaluation of the buildings and by making them more attractive to buyers and tenants, setting them apart from the high volume of competing properties on the market.
In order for the real estate sector to be competitive and anticipate customers’ needs, as well as have a net benefit on the quality of life of residents – it has to innovate and adapt. Establishing a new approach to technology – through making best use of the smart city concept – is a vital stage in this process and presents great challenges, but also near-infinite opportunities.
Building upon what we have already achieved since our formation in 2015 – and on our track record of incorporating the best smart solutions into our developments – we are excited to embrace these possibilities and thrive.
Global CEO, Planet Smart City