These are exciting times. The fourth industrial revolution (IR4) is transforming the way we use space and interact with buildings. As a result, the application of emerging and existing technologies will have a major impact on real estate development, from the selection and acquisition of sites, to design, planning, construction and sale of a completed scheme.
We’re launching a series of articles over the next few weeks that will draw upon wider research conducted at Montagu Evans on the tremendous opportunities for the industry presented by IR4.
New technologies will have an impact on all aspects of the real estate lifecycle, but it is where they will specifically impact planning and development where we see the great potential.
As enhanced technology becomes available, placemaking – the key to better development in our towns and cities – will benefit significantly.
Artificial intelligence and automation can already support finding a development site, allowing vast amounts of data to be sifted and development potential identified. Some professionals and developers are already testing this approach and will thrive when they find a system that works. The ability to create different designs easily, to model the impact of patterns of use, and the feeding in of actual use patterns which can be used via machine learning, will all enhance architecture and design on every scale.
Planners will be able to embrace new technology to ensure that public consultation is the only element of the process that requires lengthy periods. The process of accepting, checking and reviewing the basics within applications can be automated, leaving planners to apply their skills to consultation, strategy and placemaking.
The government should also invest in new technologies supporting land registration and in simplifying and accelerating transactions. Using distributed ledger technologies (e.g. blockchain), financial and legal transactions can be faster and more secure, speeding up purchase and sale within the development lifecycle. Imagine a developer who is able to transact a completed residential scheme over a weekend, with people moving in the following week!
Key stages in the development lifecycle will be faster and improved, leading to higher volume of development and, more importantly, higher quality. In just one example we have tested a scenario for a typical 100-unit residential scheme development programme in Greater London and found that these technological developments could potentially shorten the development process (excluding construction) by a year.
The time spent on repetitive low value tasks is expected to reduce dramatically and give way to more strategic, creative and value-adding activities for us humans.
Valuation of less complex assets will be highly automated, although valuation and negotiations around development sites include highly nuanced trade-offs between parties’ interests and highly skilled human input will be needed.
The widespread availability of data and information will increase transparency in the market, and remove the advantage currently given by asymmetric market knowledge. In the future, investment ‘edge’ will come from the use of information to inform creative strategies, and the ability to move quickly – largely controlled by access to funding.
Overall, the cost of prediction will be reduced. Being able to model probability in a wide range of circumstances will reduce the risk in many decisions. However, it cannot remove risk altogether so the value of human judgement will rise and become a key (and competitive) skill in leveraging these advanced technologies.
The surveyor or planner who is most able to harness data and information, and can combine that with experience, will be best placed to give value-added advice and support quicker, better development long-term. In articles over the coming weeks we will explore in detail the impact and opportunities of IR4 for each key part of the planning and development lifecycle, so keep an eye out!