The increased connectivity in the world has transformed the way we consume information, make decisions and choose to live. Industries are being forced to adapt to the changing attitudes and times. The real estate industry’s modern day evolution isn’t far behind.
Here are 5 trends in Commercial Real Estate (CRE) to watch in 2017:
1. Cities meet the suburbs:
Particularly in India, a growing middle class is creating a demanding market for integrated living. Living environments which are highly sought after need to:
Offer flexible housing options for different age groups and family structures
Be only a short commute away from the workplace, as well as have sports, recreation and entertainment facilities and convenience stores
Have good educational and medical institutions in the vicinity
Have well equipped transportation facilities
The formation of self-sustaining, all-inclusive communities through ‘townships’ is one of the many responses to this growing demand. The West has a new term for when a suburban atmosphere is equipped with all the perks of urbanization and it’s called “Surban”. Integrated, surban living and office spaces provide a better quality of life.
2. Technology and space:
In 2016, the technology behind ‘augmented reality’ occupied the limelight through the Pokemon Go phenomenon. A game through which imagery can be projected onto the physical world by a user, has triggered innovation in many industries, including commercial real estate. The idea that a potential buyer can experience a space and alter it to their liking is a unique advantage to have from a sales perspective as well.
In addition, when a property is in close proximity, ‘Global Positioning System’ (GPS) technology can also be used to draw customers out of their regular travel routes to see properties that they otherwise might not have. ‘Drone’ technology is also paving the path for a new and improved way to scout for and showcase properties.
While it may take some time before the CRE industry on the ground catches up with the technology being developed, this space offers some of the most exciting possibilities to look out for in these hi-tech times.
3. Effects of demonetization:
As an impact from 2016’s demonetization surprise, improved transparency is expected in the real estate industry in the long run. As a business that’s notorious for having a large, illegal cash component, the immediate result has been a temporary pause in the market. The situation is expected to gradually normalize with regulatory changes through the Real Estate (Regulation & Development) Act (RERA) of 2016 and other measures the government is expected to take to institutionalize real estate and improve the ease of doing business in the country.
4. Growth of a sharing economy:
A sharing economy is one which allows individuals to borrow or rent assets owned by someone else. Millennials today look more for possibilities to explore, than opportunities to settle down. This has revolutionized the way we choose to work and live.
With young professionals making up a prime portion of the workforce, with very different requirements, CRE developers are catching on to the fact that multi-functional, flexible working modules will soon be in high demand.
5. Co-working spaces:
Accompanying the entrepreneurial spirit and innovation in today’s world is the emergence of co-working spaces. Major players in the field like WeWork, Regus and Awfis have dramatically changed the way companies and individuals can operate professionally. Co-working spaces such as these typically run on membership, as well as one-time use modules. They allow people to rent flexible workspaces, meeting rooms or even a fixed spot in a shared space. The idea is to allow them take care of all the office facilities and maintenance at a fixed price, giving the user the freedom to focus all energies on their business. This creative re-invention of space and the way it is offered and used, fosters the budding entrepreneurial and collaborative culture in the country, while also making it more affordable.