Jackie Newstead of Hogan Lovells gives us insight into five technological innovations set to change how we view real estate property and explores some of the latest disruptors that will transform the real estate landscape like block chain and solar energy.
Blockchain technology can both provide secure evidence of the ownership of assets and make transfers of encumbrances on those assets. It can allow every property to have its own digital address where all information relating to it may be stored, in a universal system on a national or international scale. This would include ownership and financial information, taxes, bills, liens, easements, building performance, physical characteristics and the transaction history relating to the property. Access to such information can be either available to anyone or encrypted with limited access.
Autonomous vehicles have the ability to transform how we think about and use real property, the same way that roads, waterways, railways and airports influenced the creation of cities and suburban centres. The possibility for a revolutionary change in the location, use and design of buildings cannot be understated.
People’s choice of where to live could be less dependent on access to fixed public transportation networks and more disbursed. Children’s schools choice could be less dependent on location and bussing.
Car parks could be redeveloped for other uses or allow for more efficient use of total space as car parks are transitioned into developed property, as cars will move to less density populated areas to “wait” for their owner, or more likely take on other activities, such as delivery of packages or driving others as an Uber car.
The need for appropriate logistic hubs for long-haul truck shops and logistics will change too, affecting many commercial and industrial properties as well.
The use of internet auction sites and data rooms have been exploding over the past few years to help monetize real property and reach the largest group of potential purchases quickly and easily. We see this as useful for “commoditized” real property – simply to understand. However, for more complex transactions with larger price tags, its use may be years away, and will likely require a strong blockchain infrastructure.
Energy efficiency is something that developers strive in building as it helps the bottom line. In addition, the benefit of a LEED certification in the US or a BREAM “Excellent” rating in the UK helps them draw in tenants. However, the ability to use “wasted space” to generate electricity through solar panels will also economically benefit the owners and operators. Its primary benefit will be in suburban areas, schools, shopping centres, factories, warehouses, where the roof space is significant compared with the building density.
As the cost and efficiency of the solar panels increases, they will become a common fixture in the landscape. In addition, buildings that generate solar power may be able to use similar contracts and blockchain technology to facilitate the negotiation and sale of this power into the national grid, enhancing the productivity of an investment.
Mobile applications – the great disruptor
Mobile applications and the ability to work remotely will affect how we use office space. Companies that use hoteling are allowing their workforce to work flexibly and other companies like WeWork that create a sublease shared office environment that are competing with traditional models. This age of flexible work environments changes how offices are designed and owners will need to adapt to keep their assets financially viable. We may also see applications using augmented reality (such as the recent hit Pokémon Go) start to affect the real estate sector as well.
The path of progress
Although everything and everyone uses real estate (weather to live, shop, work, play, commute, house our electronic “cloud” or transmit our energy etc.) how we use it will be changing as technology advances, until we leave this planet.