Investments in proptech firms are expected to touch USD 1 billion in 2025, almost double from the 2020 level, with adoption of technologies gaining momentum in the real estate sector, according to a report by CII and Colliers.
In a joint report ‘Real Estate 3.0: Technology-led growth’, industry body CII and property consultant Colliers India mentioned that the COVID pandemic has provided a further impetus to technology in real estate sector to ensure seamless services for remote working, ease in construction and focus on health.
“Technologies like Internet of Things (IoT), Virtual Reality (VR), Artificial Intelligence (AI) were being used pre-pandemic. However, the adoption of such technologies increased manifold over the last two years,” it added.
With a focus on health and wellness, the consultant said that smart building materials with automated air quality systems are gaining traction.
Talking about the opportunities, the report said “a wide range of disrupting technologies including AI, VR, IoT and blockchain can play a pivotal role in reshaping real estate business.”
The rollout of 5G will help improve efficiency of building management.
“Huge opportunity in deep technology in proptech. Proptech investments are expected to touch USD 1 billion in 2025 from USD 551 million in 2020. Technology at various levels to make Indian real estate more transparent,” it added.
Colliers India said proptech has become a popular catchphrase in recent years, with COVID-19 giving rise to technology innovation on a scale never seen before.
“So far, proptech in India has been largely limited to residential marketplaces and a few entities dealing in commercial real estate, while mostly focusing on listing residential and commercial properties. However, technology has now infiltrated every aspect of real estate, from planning and design to construction techniques to building facilities management and property management,” the report said.
Stating that the usage of technology is sweeping the real estate sector, the consultant said that proptech is expected to grow significantly over the next few years led by ease of transactions, transparency and advanced technology.
The consultant also pointed out certain challenges in adoption of technologies such as privacy and data security, cost implications for occupiers and developers, and heavy reliance on power supply.
“Reduced demand for manual labor could lead to layoffs of employees, along with increased need for specialized labor,” the report cautioned.
Akhil Saraf, Founder and CEO, Reloy, said building technology for real estate can not only reduce cost but increase the value of the asset class.
“The problems are varied across all verticals of a builder from construction technology and tracking to sales, marketing and CRM efficiency. Real Estate being a high-value product with a long product lifecycle, it requires unique technology to realise the underlying value of it, he added.
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