Benefits Of Investing In A Pre-Launch Real Estate Project
Investing in real estate has always been a tried and tested method for wealth accumulation. However, within the realm of real estate investment, pre-launch projects offer a unique set of advantages that savvy investors can capitalize on. Here are some key benefits of investing in a pre-launch real estate project:
- Early Bird Advantage:
- Investing in a pre-launch project allows investors to get in at the ground level, often at significantly lower prices compared to post-launch rates.
- Early investors typically benefit from special discounts, promotions, and incentives offered by developers to attract initial capital.
Capital Appreciation Potential:
- As the project progresses from pre-launch to completion, the value of the property tends to appreciate.
- Investors stand to gain from the increased value of their investment, potentially earning substantial returns upon completion.
Choice of Prime Units:
- Investing early provides access to a wider selection of units, including prime locations and desirable floor plans.
- Investors can cherry-pick units with optimal views, amenities, or orientations, maximizing their potential for future resale or rental income.
Customization Opportunities:
- Pre-launch investors often have the opportunity to customize their units according to their preferences.
- This customization can include selecting finishes, layouts, and upgrades, adding personal touches that enhance the property’s appeal and market value.
Locking in Lower Prices:
- Investing in a pre-launch project allows investors to secure units at lower prices compared to buying after completion.
- This initial cost advantage translates into higher profit margins or lower mortgage burdens for investors, amplifying their overall returns.
Flexible Payment Plans:
- Developers typically offer flexible payment plans during the pre-launch phase, spreading out payments over the construction period.
- This flexibility eases the financial burden on investors, making it more manageable to fund their investment without significant upfront capital.
Potential for High Rental Yields:
- Investing early in burgeoning neighborhoods or high-demand areas can lead to attractive rental yields.
- Pre-launch investors can capitalize on emerging trends and rental demand, securing tenants quickly and generating consistent rental income streams.
Mitigated Risk:
- While all investments carry inherent risks, pre-launch projects often offer lower risks compared to investing in completed properties.
- By conducting thorough due diligence on developers, locations, and market conditions, investors can mitigate potential risks and make informed investment decisions.
In conclusion, investing in a pre-launch real estate project presents a host of benefits for discerning investors looking to capitalize on early opportunities in the market. From favorable pricing and customization options to potential for capital appreciation and rental income, pre-launch investments offer a strategic pathway to building wealth through real estate. However, it’s essential for investors to conduct diligent research, assess risks, and work with reputable developers to maximize the potential rewards of their investment endeavors.
India Commercial Real Estate Market Analysis
The India Commercial Real Estate Market size is estimated at USD 67.08 billion in 2023, and is expected to reach USD 223.25 billion by 2028, growing at a CAGR of 27.19% during the forecast period (2023-2028).
· The COVID-19 pandemic resulted in the work-from-home (WFH) culture, which had a short-term impact on new space obligations. New office space in the seven cities in India was 36.34 million sq. ft in 2020, down by 30% from the previous year. Despite setbacks, the recovery period for the industry looks positive, with the reopening of offices and an increase in leasing activity.
· According to industry experts, from September 2022, grade A offices in Indian cities such as Bengaluru and Mumbai had an average cap rate of 8.25 in core locations. In comparison, the cap rate of grade A offices in Taipei was 2.35 on average in 2022. As of the second quarter of 2022, other regions of Gurugram had the highest vacancy rate combined at 35.9 percent. In comparison, the Cybercity of Gurugram in India had a vacancy rate of 5.4 percent, the lowest amongst other submarkets of the Delhi NCR region, according to industry experts.
· Retail and hospitality are also growing significantly in the commercial real estate market, providing the much-needed infrastructure for India’s growing needs. India’s commercial real estate sector is projected to be accelerated by large-scale investments by institutional investors in the coming years. The retail real estate sector in the country has been dramatically boosted by government initiatives, such as Make in India, and other reforms in the realty sector, such as the introduction of the Real Estate Regulatory Authority (RERA) and GST.
· Despite their initial troubles, developers and buyers are moving to the commercial real estate sector due to the transparency and competence of the industry, which has attracted increasing amounts of foreign direct investments (FDI) in the commercial estate. The country’s economic growth is driving demand for commercial property. Government initiatives and urban development policies and programs (Smart City, AMRUT) are expected to contribute to the need for real estate infrastructure.
· The demand for office space in the nation is driven by reasons such as flexibility, comfort, and convenience. Most businesses in various industries, including IT, manufacturing, BFSI, startups, and even boutique businesses, are looking for office space to accommodate their employees. Additionally, many companies intend to expand to new areas, open remote or satellite offices, or both, adding to the demand for these spaces.
· Technology development has elevated commercial real estate to a new level. It is now feasible to offer virtual property tours, improve customer relationship management, conduct online transactions, and improve communication between the seller and the buyer thanks to cutting-edge technology like artificial intelligence, virtual reality, data analytics, and others.
India Commercial Real Estate
Industry Segmentation
Commercial real estate (CRE) is only used for business-related activities or to offer a workspace, as opposed to being utilized as a residence, which would fall under the residential real estate category. Most frequently, renters lease commercial real estate to conduct businesses that generate cash.
The India Commercial Real Estate Market is Segmented by Type (Offices, Retail, Industrial and Logistics, and Hospitality) and By Key Cities (Mumbai, Bangalore, Delhi, Hyderabad, and Other Cities). The report offers market size and forecast for the Commercial Real Estate Market in India in value (USD Billion) for all the above segments.
A complete background analysis of the India Commercial Real Estate Market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact is included in the report.
India Commercial Real Estate Market Trends
This section covers the major market trends shaping the India Commercial Real Estate Market according
to our research experts:
Office Space Demand To Propel The Market In India
Investor confidence in a swift economic recovery is being boosted by the rapid pace of the vaccine campaign, which is backed by a decrease in COVID-19 cases. With the gradual unlocking of economic activities and employers’ shift in office premises for increased demand for co-working space, developers are optimistic about a healthy rebound in office leasing activity.
During the financial year 2022, Bengaluru recorded the highest influx of new office supply accounting for 28 percent of the total new office supply across seven major cities of India. Hyderabad contributed 23 percent of the total share and stood in the second position. In the first quarter of 2022, 31 percent of the total office leasing share in India was held by Bengaluru. Pune and Hyderabad followed with 17 percent respectively, according to Colliers International.
According to research published by real estate consultant Colliers India, office space supply
increased 49% to 32.8 million square feet during the January–September 2022 period across six cities due to the completion of numerous commercial developments to fulfill the increasing demand. According to Colliers India, the same amount was 22 million square feet in the same period across six cities Bengaluru, Chennai, Delhi-NCR, Hyderabad, Pune, and Mumbai.
The new office supply, which was 8.1 million square feet from January through September 2022, decreased by 1% from the year before. From 2.1 million square feet in fresh supply, India’s financial hub saw a 16% decrease to 1.8 million square feet. Chennai experienced the most significant increase in the number of new offices,
which went from 0.9 million square feet to 4.2 million square feet. Delhi-NCR
had a 133% increase in floor space from 2.7 million square feet to 6.3 million
square feet, while a 56% increase in new office space supply increased from 5.1
million square feet to 7.9 million square feet.
The Demand For Flexible And
Co-Working Spaces Is On The Rise
According to industry
experts, as of March 2022, Bengaluru recorded the most operational flex space
centers among all tier-1 cities in India. Mumbai followed with 343 flex space
centers. As of March 2022, Bengaluru recorded around 25 thousand leased flex
seats, the highest among all tier-1 cities in India. Pune followed with more
than 16 thousand leased flex seats.
In the financial year
2022, 147 flex seat transactions were concluded in the Delhi NCR region, the
highest among other tier-1 cities of India. Mumbai followed with 133 flex seat
transactions during the same year. In the financial year 2022, the information
technology and new tech sector contributed 30 percent to the flex seat take-up,
the highest among all other sectors in India. Start-ups also opted for flex and
co-working spaces and took 18 percent of the total share. The demand for
flexible and co-working spaces is on the rise in the Indian office real estate
market.
Once dominated by information technology, office spaces are being increasingly leased by other
sectors such as BFSI (banking, financial services, and insurance), engineering,
manufacturing, e-commerce, and co-working sectors. COVID-19-induced changes include
the introduction of a hybrid work model in workplaces across the country.
Smaller homes and larger family sizes propelled the growth of flex and co-working spaces in the country. IT-ITes, BFSI, e-commerce, and professional
services employees emerged as the key occupiers of these flexible working
spaces. Start-ups and small and medium enterprises (SMEs) focusing on tapping
the talent of the mobile workforce also resulted in the demand for flex seats.
India Commercial Real Estate
Industry Overview
The Indian commercial real
estate market is partially fragmented and highly competitive. Indian retail
real estate is becoming a preferred destination for global institutional
investors, driven by robust office space take-up, declining vacancy levels, and
rising rentals. Some of the country’s major commercial real estate players
include DLF, Godrej Properties, Housing Development and Infrastructure Ltd
(HDIL), and Oberoi Realty. The Indian retail real estate market is reaching an
intermediate consolidation phase as the number of developers offering
commercial properties is decreasing. The small-scale developers are also
merging with the big real estate developers or exiting the market.
India Commercial Real Estate
Market Leaders
1. DLF Ltd
2. Godrej Properties Ltd
3. Housing Development and Infrastructure Ltd (HDIL)
4. Oberoi Realty
5. IndiaBulls Real Estate
*Disclaimer: Major Players
sorted in no particular order
India Commercial Real Estate
Market News
November 2022: Tiger Global sponsored A
cooperation between the occupancy detection platform Butlr and the data and
technology company Propstack that will enable occupancy sensing across
commercial real estate projects in India. To make data-driven real estate
decisions and enhance the workplace experience, Propstack’s Indian clients will
be able to obtain and use occupancy and space usage data offered by Butlr,
thanks to this agreement.
April 2022: The Canada Pension Plan
Investment Board (“CPP Investments”) and TATA Realty and
Infrastructure Limited established a joint venture to build and own commercial
office space in India. Aiming to handle assets worth more than INR 50 billion
(USD 604.18 Million), the joint venture will focus on stabilizing and
developing assets. With a pledge of INR 26 billion from CPP Investments, the
joint venture’s total aggregate equity value will be INR 53 billion (USD 640.43
million).
SOURCE: mordorintelligence.com
The India Commercial Real Estate Market is Segmented by Type (Offices, Retail,
Industrial and Logistics, and Hospitality) and By Key Cities (Mumbai,
Bangalore, Delhi, Hyderabad, and Other Cities). The report offers market size
and forecast for the Commercial Real Estate Market in India in value (USD
Billion) for all the above segments.
The Indian commercial real estate market is partially fragmented and highly
competitive. Indian retail real estate is becoming a preferred destination for
global institutional investors, driven by robust office space take-up,
declining vacancy levels, and rising rentals. Some of the country’s major
commercial real estate players include DLF, Godrej Properties, Housing
Development and Infrastructure Ltd (HDIL), and Oberoi Realty
Top 5 Tech Trends Transforming Real Estate In 2023
Between AI, blockchain, ESG and capital inflow – what will impact industry the most?
The global economy was thrown into turmoil last year, with the crypto and real estate markets among the sectors hit the hardest. However, while the real estate industry will remain slower, it shows signs of recovery anytime mortgage rates drop, which increases homebuyer activity, and the supply keeps shrinking. Regardless of the real estate market stagnation and its returning to the normality of the pre-Covid market conditions, physical assets are generally the safest investment in an inflationary environment. Elon Musk posted in a thread on Twitter last year, “it is generally better to own physical things like a home [..] when inflation is high.” While some in the industry welcome consolidation and its potential benefits for consumers, I believe the true disrupters of the real estate market have yet to emerge. As we’ve seen in other industries, it often takes young, agile tech startups to revolutionize consumer behavior and outmaneuver legacy businesses. To help you better understand and prepare for the future, I will examine the current and emerging technological trends transforming the real estate industry.
As we look forward into 2023 and beyond, the real estate industry is poised for significant disruption through the continued development and adoption of new technologies. Here are five key trends to watch out for:
1. Generative AI
From the widespread use of AI-generated Instagram pictures through Prizma to the widespread adoption of OpenAI’s ChatGPT, it’s clear that AI is poised to play a major role in the future of real estate. We’ll explore this trend and others in detail, drawing on the insights of experts in the field to help you stay ahead of the curve.
Artificial intelligence has the potential to enhance the real estate industry in several ways. Generative AI is being used to create more accurate and detailed representations of properties, recognize and classify different types of buildings and spaces, and generate descriptions of properties based on market trends and feedback from buyers. AI is also being used to automate document review, analysis and generate personalized real estate listings based on data from social media and other sources. Additionally, the automation of certain tasks through AI can free up real estate professionals to focus on more value-added tasks, improving efficiency and productivity.
However, while AI has the potential to greatly improve the real estate industry, it is important to consider the potential drawbacks. One major concern is accuracy and bias. AI algorithms are only as good as the data they are trained on, and if the training data is biased or incomplete, then the AI will produce biased results. This could lead to discrimination in the real estate market and perpetuate existing inequalities.
Traditional architects and interior designers are already embracing their creativity and the AI tools like Midjourney (images for this article are generated by it), Dali, Stable Diffusion, and Picsart, which allows them to save time on rendering 3D spaces with new inspirational ideas, which would potentially be used in real-life real estate development and furnishing.
2. Blockchain – Real World Assets And Proptech 3.0 Evolvement
As per my personal experience, after networking with hundreds of investors, the sentiment is the following: Proptech VCs deem crypto too intricate and Crypto VCs find real estate boring. In Q1 2023, we are seeing a shift in the conversations. Are they finally discovering common ground in their pursuit of the world’s largest asset class future?
“The market for property is probably the oldest market in the world, and only now is it beginning to change rapidly,” noted Peter Thiel, founder of PayPal. The reason for such a rapid change of real estate is the rapid digitalization of real estate ownership during the pandemic and the growing demand for RWAs – Real World Assets protocols with an adjusted risk/reward balance after the Terra and FTX collapses. Real estate ownership is a digital asset, because the real estate is immovable and all the transfer functions like recording, signing and electronic notarization are pushed online by legislation before and during lock-downs.
As a result of RWA movement in crypto, we’ll see Proptech 3.0 evolving as the next wave of innovation, offering a peer-to-peer ecosystem that is more secure, transparent, and efficient. Proptech 3.0 will become the new DeFi backed by real estate ($300+ trillion globally), and it will be multiple times larger than the traditional DeFi by value locked. As I am writing the article the DeFi market is $58.47 billion, and crypto locked in stable coins is worth $135 billion. With just a couple of institutional real estate players brought to RWA protocols the market size could be surpassed within days. Meanwhile, four RWA lending protocols such as Maple and Centrifuge are already ranked among top 10 DeFi protocols.
With potential home insurance and title insurance RWA pools, the value in this capital-intense and profitable industry will be shared with the community. The process of obtaining a mortgage will become smoother and more accessible. Collateral becomes easier to manage, and smart contract settlements eliminate the possibility of human error, hacks or corruption.
Important to mention that Proptech 3.0 is not about decentralization per sei. It shouldn’t be the ultimate goal for founders and the community. Decentralization is critical for the protocols behind title records, smart contracts execution for transactions, for community votes, but not for the entire industry as many off-chain oracles have to communicate to the protocols. The ultimate aim is to eradicate fraud and create an industry where all participants have an equal opportunity to succeed. By preventing a select few companies from monopolizing the market, Proptech 3.0 allows for a more honest and equitable system that prioritizes the interests of all parties involved.
Price discovery remains the lacking piece of the puzzle for Proptech 3.0 with the residential sector advancing faster than commercial due to more complexity in the latter. Many teams are showing traction already. You may consider liquidity to be the second largest obstacle for real estate performing well on-chain, but it’s the web3 solutions like NFT technology that will bring liquidity to the market by reducing fees and making the mobility demand closely correlate with homeownership velocity.
Coinbase, the No. 1 U.S. crypto exchange, not only predicts that institutional players will seek to use DeFi platforms for tokenized RWAs but also that NFTs are increasingly being used for RWAs on-chain authentication, including real estate, and financial instruments. RWAs are an opportunity for the NFT sector to expand beyond largely speculative use cases.
The EthereumETH -0.4% co-founder Buterin in an interview with Forkast also talked about his vision for NFTs and real estate. According to Buterin, “Applying fractional ownership to NFTs could be extended to NFTs representing the real estate.” Buterin acknowledged that NFTs or DAOs will be useful for managing real estate portfolios.
In my next article I’ll try to point out startups utilizing Web3 for construction, mortgage, home insurance, fractional ownership, their traction and how they all would work together between each other and with solutions my team is developing, forming a full eco-system of the future financial world backed by immovable physical assets with an omnichain life cycle.
3. Decarbonization And Sustainability
When I moved to Silicon Valley after studying Sustainable Urban Development and having sustainability-related features in mind for my company, I was shocked to find few people in Silicon Valley cared about sustainability in real estate back in 2016 (in comparison to Abu Dhabi and Dubai where I moved from). However, as we see the first evidence of the financial success of carbon-focused ventures such as Tesla and the new evolving carbon market (the value of the global carbon market soared 164% in 2021 to a record high of $851 billion), the real estate industry is starting to take notice.
Decarbonization of real estate is important for several reasons. First, the real estate sector is responsible for significant carbon emissions, mainly from heating and cooling buildings, and powering electricity and appliances. Second, it can lead to cost savings in energy bills and maintenance costs, and improve indoor air quality, which benefits building occupants. Finally, decarbonization can increase the market value and competitiveness of buildings, as consumers and tenants are increasingly demanding energy-efficient and sustainable properties.
According to Brendan Wallace, co-founder and managing partner of Fifth Wall, the largest proptech venture capital firm with $3.2 billion in assets under management, “The real estate industry is the single largest CO2 emitter on earth and explosion in real estate-related climate technology has also begun, covering not only software but also hardware and material technologies that can decarbonize the industry. The interconnectedness of automation and smart-building technology with decarbonization will become increasingly obvious as smarter assets can be more sustainable assets.” It’s not a surprise that one notable example is the VC firm Fifth Wall, which has made sustainability a key focus of its investments and has backed companies like Assembly OSM and Brimstone. These companies aim to reduce the carbon footprint of buildings and make real estate more energy efficient.
The decarbonization of real estate has the potential to make a huge impact on the environment, and as more people become aware of the issue, the real estate industry will continue to take steps towards sustainability. Moreover, Wallace is also suggesting that, “real estate will become the keystone in the global imperative to remove C02 from the atmosphere to prevent climate change. And not just in the obvious ways like those that Fifth Wall actively invests in, like decarbonizing buildings, but in the use of land to protect and/or regrow forests and jungles to generate nature-based carbon offsets. The value of land that is capable of dense, high-volume photosynthesis is posed for enormous growth over the course of the next decade.”
4. Contech – Innovation In Construction
As an immigrant to the United States and a former real estate developer, I have always held the belief that homeownership is a fundamental part of the wealth creation and preservation and of course the American Dream. Unfortunately, the current state of the real estate industry has made this dream out of reach for many. The affordable housing crisis continues to persist, with a recent report from the National Low Income Housing Coalition finding that there is a shortage of 7.2 million affordable and available rental homes for extremely low income renters. This problem has been exacerbated by the COVID-19 pandemic, which has put financial strains on renters and led to increased evictions.
However, there have been some positive developments in recent years due to contech or construction tech rapidly evolving. When it comes to pure tech, online solutions, 3D printing and robotics can help increase housing affordability in several ways. Alexey Dubov CIO and co-founder at Mighty Buildings shares: “I observe that the overall dynamic in the building industry is mainly focused on cost-efficient solutions, including materials, building systems, and project management. Not surprisingly, materials and solutions that are cost-competitive and sustainable are getting the major spotlights. Tangible Materials and Plantd are good examples of early-stage companies getting traction.“
The use of advanced construction techniques like energy innovation, 3D printing and modular building can help reduce the cost of housing by streamlining the building process and reducing the need for labor. It can also allow for more customization and flexibility in the design of housing units, which can be particularly beneficial for affordable housing projects. However, it’s important to consider the potential impacts on the construction industry and to ensure that these technologies are used in a way that is fair and equitable for all stakeholders.
When it comes to robotics in construction, it can help reduce the cost of building homes by automating certain tasks and reducing the need for labor. This can help lower the price of new homes, making them more accessible to a wider range of buyers.
“An interesting observation from the International Builders Show 2023 is that traction for new products and materials was measured in decades and now we’re seeing it brought down to years. Emphasis on these new market opportunities from private and public capital, as well as organizations like NAHB indicate this is more than tailwind, but perhaps a tipping point.” – Dennis Steigerwalt, President at Housing Innovation Alliance, shared. Great examples of new construction products and materials are Simple Homes, Diamond Age 3D, rheia, Mighty buildings, plantd, BotBuilt.
Innovation in regtech (regulatory technology) can also help increase the supply of housing and make it easier to build new homes faster. Regtech solutions can help streamline the permitting and approval process for new construction projects, reducing the time and cost involved in obtaining the necessary approvals. For example, companies like Permitify and PlanGrid are using technology to automate the permit process and to provide an online platform for managing construction projects.
Finally, buildings have all the prerequisites to become power plants. Solutions like energy storage such as Our Next Energy are the necessary puzzle pieces to get there.
5. Capital Flowing In Proptech
Global venture capital funding for proptech companies saw a decline from $32 billion in 2021 to $19.8 billion in 2022, representing a 38% drop. Despite this decline, the trend for the past 5 years has been upward, with the total amount of funding for proptech companies increasing from $10 billion in 2017 to $32 billion in 2021. This is a testament to the growing importance of technology in the industry and the potential for innovation to transform the way we buy, sell, and manage property. According to a prediction by Grand View Research, the real estate technology market is expected to reach $94.2 billion by 2030. This represents a major shift in the industry and highlights the potential for technological solutions to tackle some of the most pressing issues facing the real estate sector today.
One of the key drivers of this growth is the increasing focus of venture capital firms on the real estate technology space. Generalist investment funds like a16z (Andreessen Horowitz) have been at the forefront of this trend, investing in proptech companies with partners Alex Rampell and Sumeet Singh understanding real estate. Their recent loud proptech deal is Adam Neumman’s FlowFLOW2 -3.8%, which I personally believe will eventually tap into crypto tokenization for tenants. There are other great examples of proptech only focused venture firms such as Camber Creek, RET Ventures, MetaProp and others with fund sizes between $150 million and $300 million.
The impact proptech investments cannot be overstated. By making it easier and more affordable for people to buy homes, we are helping to address one of the most pressing social and economic issues of our time: the affordability of housing. This is particularly important in cities like Miami, San Francisco, New York, and London, where the cost of living is skyrocketing and the affordability of housing is becoming a major concern.
Moreover, the investment in real estate technology has the potential to create new jobs and boost economic growth. By making the process of buying and selling real estate more efficient, we are reducing the time and effort required for transactions, freeing up resources for other economic activities. This can help to stimulate economic growth and create new opportunities for people to achieve their financial goals.
Rise Of Blockchain & AI Technology: What To Expect From 2023-24 ?
It must be noted, however, that the blockchain is secure at its
base, and additional layers and applications are vulnerable. So, machine
learning in the financial industry will help to improve the deployment of
blockchain apps and predict possible system breaches, improving security.
Blockchain is considered a shared and permanent ledger that will
be used for the encryption of data in the future. AI engine, on the other hand,
enables an individual to analyze and make decisions from the collected data. It
is worth mentioning that each technology has its multiple complexions, but
artificial intelligence and blockchain together will provide many
benefits.
This combination of the inherent strength of blockchain to
provide immutable data that could be trusted implicitly and the AI’s ability to
draw valuable insights from that data is very complimentary.
Advantages To Highlight
For 2023-24:
Because of the distributed ledger’s immutability and
cryptography, the data in a blockchain is well-protected. A blockchain is ideal
for storing highly sensitive personal data like medical notes or investment
portfolios.
On the other hand, AI craves data continuously and in high
volumes. What is underway now are algorithms that will allow AI to work with
encrypted information without exposing it.
It must be noted, however, that the blockchain is secure
at its base, and additional layers and applications are vulnerable. So, machine
learning in the financial industry will help to improve the deployment of
blockchain apps and predict possible system breaches, improving security.
User Trust
There is an actual trust deficit between AI’s
decision-making abilities and the public’s trust in the accuracy of such
decisions. Regardless of its performance, people won’t use AI if they don’t
trust it. Putting the brakes on the broader adoption of AI is the impossibility
of explaining decisions made by the computer. With blockchain’s possible to
record the decision-making process, AI can gain public trust much sooner.
Blockchain and AI can make the way computers think more
transparent. A distributed ledger can store every decision made by AI, data
point by data point, and make them available for analysis.
Blockchain and the distributed ledger can store large
amounts of encrypted data, and AI can manage and analyze it effectively with
each emerging use case. This synergy will give rise to new markets for the
combination of the two, giving rise to data, model, and AI marketplaces.
Giant Web2 monopolies like Google, Facebook, and Amazon
have access to large volumes of data useful for AI processes for analysis and
decision-making. Still, these monopolies ensure that this information is
unavailable to others. Financial and voluntarily shared Web3 data can provide
an antidote to such hoarding.
AI can provide a perk for the security of online
blockchain operations like exchanges by improving how we work with data.
Computers process encrypted data by going through multiple combinations of
characters in search of the correct one to verify a transaction. Like a human
hacker, AI learns and sharpens its skills with every successful code crack. But
unlike a hacker, AI won’t need a lifetime to learn the combinations. With the
correct training data, AI can do it almost instantly.
Optimizing Energy
Consumption And Reducing It’s Carbon Footprint
When it comes to data mining is a very energy-consuming process.
AI has proven tools via machine learning to deal with the issue. Google data
centers have reduced their energy consumption by 40% by training the DeepMind
AI on historical data from thousands of sensors within a data center. The same
principle can be used for mining, leading to lower prices for mining
hardware.
Smart Contract Auditing
And Verification
Blockchain systems have thousands of smart contracts programmed
to release and transfer funds automatically when certain conditions are met.
Network consensus must be reached to operate smart contracts on the blockchain.
Most smart contract code is public and can be reviewed by anyone. Hackers can
patiently and thoroughly go through every line of code in search of loopholes.
AI can help verify smart contracts and predict vulnerabilities that can be
exploited.
Closing Thoughts
Whenever a new technology has emerged, critics have picked out
flaws in it or have been scared to engage their business and utilize its
advantages completely.
When cloud storage was introduced, its critics bemoaned
its privacy and security risks. AI was met with more dire warnings, with
reports of “the growing use of AI systems to lead to the expansion of
existing threats, the introduction of new threats and a change to the typical
character of threats.”
Blockchain is seen in a similar light using terms like
“black money” or the “underground economy.” Yet, each of
the above technologies adapted to defray those concerns by creating hybrid
models or fixing security concerns.
The year 2023 will be a year for a juxtaposition of AI and
blockchain to build expert systems that can optimize and make reliable
predictions in dozens of business verticals, from supply chain to food security
and from HR to determining consumer preferences.
Blockchain and artificial intelligence (AI) form a powerful
combination, offering enhanced security, transparency, and trust in various
industries. While blockchain provides immutable and trusted data, AI can
analyze it to derive valuable insights. This synergy opens up new
possibilities, including data protection, user trust, optimized energy
consumption, and smart contract auditing. As we move forward in 2023-24, the
convergence of AI and blockchain promises to revolutionize multiple business
verticals, paving the way for optimized predictions and reliable solutions.
Explore the synergistic potential of blockchain and artificial
intelligence (AI) in enhancing security, transparency, and trust in various
industries. Discover how AI can improve the deployment of blockchain
applications, while blockchain technology provides immutable data and enables
transparent decision-making by AI. Learn about the advantages of this powerful
combination, including data protection, user trust, optimized energy
consumption, smart contract auditing, and more. Prepare for the exciting possibilities
that the convergence of AI and blockchain will bring in 2023-24
Sources : Indiaai.Gov.In
How Blockchain Technology Is Changing Real Estate
Given blockchain’s disruption of financial services and subsequent
widespread application across industries, it’s hard to find a segment that has
not been influenced by the technology. Cryptocurrencies have made a
strong impact on payments, remittances, and foreign exchange. Initial coin offerings (ICOs) have challenged stock investing,
startup loans, and venture capital. Even the food supply chain
industry has been upended by blockchain.
Real estate hasn’t escaped blockchain disruption either.
Previously, transacting high value assets such as real estate exclusively
through digital channels has never been the norm. Real estate transactions are
often conducted offline involving face-to-face engagements with various
entities. Blockchain, however, opened up ways to change this. The introduction
of smart contracts in blockchain platforms now allows assets like real estate
to be tokenized and be traded like cryptocurrencies like bitcoin and ether.
Trading real estate this way varies. Here are six ways
blockchain has changed the real estate game.
1. Platforms and Marketplaces
Real estate technology has traditionally been primarily
concerned with listings and with connecting buyers and sellers. However,
blockchain introduces new ways to trade real estate and can enable trading
platforms and online marketplaces to support real estate transactions more
comprehensively. For example, MICROFY has developed a platform that uses
blockchain technology to facilitate real estate and rental property
transactions. By tokenizing real property, assets can then be traded much like
stocks on an exchange and transactions can be done online.
MICROFY allows sellers to tokenize assets, essentially handling
it like a stock sale, and liquidating that asset through a token sale using the
platform. The collected tokens can be exchanged for fiat currency, with buyers
owning a percentage stake of the property.
2. No Intermediaries
Brokers, lawyers, and banks have long been part of the real
estate ecosystem. However, blockchain may soon usher in a shift in their roles
and participation in real estate transactions, according to a report by
Deloitte.1 New platforms can
eventually assume functions such as listings, payments, and legal
documentation. Cutting out the intermediaries will result in buyers and sellers
getting more out of their money as they save on commissions and fees charged by
these intermediaries. This also makes the process much quicker as the
back-and-forth between these middlemen gets cut.
Key Takeaways
- Blockchain technology has impacted
the real estate industry in a variety of ways, including offering a new
means for buyers and sellers to connect with one another. - Blockchain could be used to cut
intermediaries out of the real estate transaction process, thereby
reducing costs. - This technology could also help to
codify the practice of fractional ownership of real estate.
3. Liquidity
Real estate has long been considered an illiquid asset since it
takes time for sales to conclude. This isn’t the case with cryptocurrencies and
tokens since they can, in theory, be readily traded for fiat currencies through
exchanges. However, as tokens, real estate can be readily traded. A seller
doesn’t have to wait for a buyer who can afford the whole property in order to
get some value out of their property.
4. Fractional Ownership
By allowing fractional ownership, blockchain also lowers the
barriers to real estate investing. Typically, investments would require
significant money upfront in order to acquire property. Alternatively,
investors with could also pool their money to acquire bigger ticket properties.
Through blockchain, investors would simply have to access a trading app to buy
and sell even fractions of tokens as they see fit. In addition, fractional
ownership would also help them avoid managing the properties themselves such as
maintenance and leasing.
Upkeep alone can add up to significant costs and dealing with
tenants may be a troublesome effort. This also affects related activities such
as lending where property owners often have to put their properties as
collateral for loans in order to get quick access to cash. Depending on the
terms, property owners may also continue enjoying use of their property.
5. Decentralization
Blockchain commands trust and security as a decentralized
technology. Information stored in the blockchain is accessible to all peers on
the network, making data transparent and immutable. One only has to go back to
the housing bubble crash in 2008 to see how greed and the lack of transparency
in the part of institutions can have catastrophic consequences. A decentralized
exchange has trust built into the system. Since information can be verifiable
to peers, buyers and sellers can have more confidence in conducting
transactions. Fraud attempts would also be lessened. Smart contracts are
increasingly becoming admissible records
with Vermont and Arizona passing such legislation. As such,
smart contracts would have more enforceability beyond the technology itself.
6. Costs
The transparency associated with a decentralized network can
also trim down costs associated with real estate transactions. Beyond the
savings made by cutting out intermediaries’ professional fees and commissions,
there are other costs such as inspections costs, registration fees, loan fees,
and taxes associated with real estate. These costs even vary depending on the
territory that has jurisdiction. Like intermediaries, these can be reduced or
even eliminated from the equation as platforms automate these processes and
make them part of the system.
Global real estate is worth hundreds of trillions of dollars,
but is dominated by the wealthy and large corporations. Through blockchain
technology, it is possible that more people will be able to access the market
where transactions can be made more transparent, secure, and equitable. Real
estate transactions may eventually become truly peer-to-peer activities with
blockchain-powered platforms doing most of the work.
SOURCE: investopedia.com
9 Augmented Reality Technologies for Architecture and Construction
We know that the construction sites are often chaotic, noisy and dirty spaces. Although the adoption of the BIM system reduces many of the incompatibilities and unpleasant surprises during the construction process, it is inevitable that doubts arise and errors occur during construction. And, more importantly, every mistake or redo costs a lot of money and time.
The idea is that Augmented Reality applications can provide a more accurate view of what will be built, including all layers of materials and installations that are often complex to understand through drawings. For this, 3D plans and even virtual model holograms are used to improve the understanding of the project and facilitate the execution of projects. And even during construction, the ability to see through walls and understand the path of the technical installations facilitates the process, reduces the possibility of errors, and even guides the construction of complex geometries.
To fully use Augmented Reality you need a device (usually glasses). Currently, several companies manufacture AR hardware, but the most popular used in construction is Microsoft HoloLens. One of the big reasons why home builders choose Microsoft HoloLens is the price and the fact that it is now certified as basic protection glasses. The company DAQRI has developed a safety helmet integrated into the glasses, to facilitate even more use by construction professionals.
One of the areas that will benefit most from augmented reality is the inspection and management of works. This conceptual video shows how the work can be facilitated and improved with the adoption of technology in the future:
We have selected some Augmented Reality technologies that can revolutionize the way we approach the construction industry.
Morpholio AR Sketchwalk
AR Sketchwalk is a augmented reality tool that allows designers to use augmented reality to dive into their sketches to give both their clients and themselves a truer sense of the space. Using an iPad, you position your sketch in the plan (or site) and can walk through it, growing the walls. This makes the experience of presenting a project much more interactive and clear to the customers. Check out other Morpholio apps here.
DAQRI Smart Helmet
The DAQRI Smart Helmet is a helmet capable of visualizing projects and 3D models in augmented reality as an immersive and large-scale 3D environment. Teams can compare work-in-progress with the original design and keep the work and office in sync with an all-digital workflow.
Measure Apps for IOS and Android
Nowadays, in addition to the AR Measure, which we have talked about here, some applications are available for the same purpose. IOS 12 even comes with a measurement app installed. They work like digital rulers, calculating distances in real spaces using the cell phone’s camera. With the application you can measure objects and also draw plans from a real room. AirMeasure and MeasureKit are some of the applications for this purpose, among several others.
Augment
Augment is an application that allows users to view 3D models in real time and on the right scale, transforming a plan into a 3D model hologram, or simulating life-size products. The platform is available for smartphones and tablets and is used by product designers, sales and marketing teams for reducing prototyping costs, increasing customer appeal and boosting sales.
Fologram
Fologram transforms 3D models into full-size construction instructions through augmented reality glasses, such as the Hololens. The program seeks to facilitate the construction of complex projects that require a series of measurements, verification and specific care through digital instructions that are virtually superimposed on the work space, directing a step-by-step guide for masons during the construction process.
GAMMA AR
GAMMA AR is a building site monitoring application that uses augmented reality technology to overlay BIM 3D buildings via smartphones or tablets. It allows you to compare the reality of the work with the planning information contained in the project. GAMMA AR enables 3D BIM models to be viewed before and during the building process, creating an understanding of planning, avoiding errors, and reducing construction costs.
WakingApp
WakingApp, an augmented virtual reality software company, has recently released add-ons that enable Autodesk Revit and Fusion 360 users to turn their 3D designs into augmented reality and virtual reality through a smartphone or tablet.
ARki
ARki is a real-time augmented reality visualization service for architectural models. It incorporates RA technology into the architecture by providing 3D models with multiple levels of interactivity for both design and presentation purposes. Can be used on any iOS/Android device.
A technological innovation is revolutionizing one of the oldest professions in the world. Augmented reality has just broken onto the scene and has already been transforming civil construction. The changes are seen not only in designing and modeling, but also in building. Augmented reality benefits the entire construction team: engineers, designers, architects, project managers and service providers.
SOURCE: archdaily.com
5 Real Estate Technology Trends To Expect In Future
Just a few weeks away from 2023, all eyes in the real estate industry are turning to the new year. This is understandable considering the turmoil that we’ve experienced since 2020.
Despite the turbulence of the last couple of years, I think it is safe to say that the real estate industry as a whole has weathered the storm relatively well, and this is—at least partially—owing to technology advancements and tools that supported all stakeholders during these tough times.
Agents, investors, homeowners, lenders, property managers and real estate entrepreneurs are all better off because of technology. So, the question that should come naturally to the minds of many players in the industry is: What further tech developments can we expect in the coming year? In this article, I will answer this question by looking at the five tech trends that could dominate real estate in 2023.
Virtual Reality
The use of virtual reality (VR) and augmented reality (AR) is not a new trend, but it is something that the pandemic has definitely accelerated. Amid closure policies, many agents and property owners had to resort to virtual property tours as the best alternative to live showings. This practice exhibited major benefits over traditional property showings, demonstrating its potential in the future as well.
A Matterport survey shows that listings with 3D virtual walkthrough close 31% faster and sell for up to 9% more.
Expect the use of VR and AR in real estate to continue expanding, especially among investors. While homebuyers might be more prompted to visit their future home and feel the atmosphere before buying, 3D tours and walk-throughs usually meet the needs and requirements of investors.
Moreover, VR will be increasingly used not only in real estate sales but also in the rental business. A growing number of landlords and short-term rental hosts provide virtualtours with their listings to attract renters. Soon, because of the success mentioned in the Matterport survey, this could become the norm for rental listings.
AI-Enhanced Analytics
The development of artificial intelligence (AI) has been on-going for decades in the real estate technology industry, and there have been major advancements in recent years. For example, property investors are able to find and analyze deals at a rate and speed previously unimaginable. This has been enabled by AI and big data.
One newly emerging trend that I expect to see more of in 2023 and beyond is quantum computing AI. The global quantum computing market size is forecast to expand from $470 million in 2021 to $1,765 million in 2026, and this is still probably just the tip of the iceberg. This relatively new technology has seen only limited application in real estate. However, I believe the potential is huge, so we could see more and more PropTech startups and companies apply quantum in their algorithms, as the technology develops.
Streamlining Of All Processes
Enhanced efficiency is by far the most important benefit of the recent boom of technology in real estate. Real estate agents, brokers, lenders, property managers, investors and even homebuyers and sellers have been able to automate many tedious day-to-day responsibilities, allowing them to complete tasks faster and better than ever before.
While a lot of CRM applications currently cover different aspects of real estate, I expect to see a further surge in comprehensive platforms that take a certain niche or cover everything, from A to Z, in 2023 and beyond. There’s a lot of potential in streamlining processes as the demand is huge among various real estate professionals.
Fractional Ownership
Another exciting real estate tech trend that will continue to grow in 2023 is fractional investment. Again, this is not something new in real estate as investors have been using syndication, real estate investment trust (REITs) and other forms of partnerships to own shares of real estate assets for decades. However, technology is further accelerating this trend in a way that many see as the democratization of the real estate market.
In the past, even with fractional ownership, investors needed to have solid amounts of initial capital to get started. For instance, most REITs have a minimum capital requirement of $25,000 in addition to working only with accredited investors. Now there are a number of PropTechplatforms that allow investors to invest in parts of real estate properties with smaller investments. This can help assure that more people have access to investing in real estate.
The Metaverse
The last major technology trend I expect to drive real estate in 2023 is the additional growth of virtual real estate and investment opportunities there. The global metaverse real estate market alone was valued at $821.9 million in 2021, with a projected increase to $5.95 billion by 2028.
This growth is supported by developments in other real estate tech trends like VR, AR and the introduction of blockchain technology to real estate. Nonetheless, buying assets in a virtual world is still a relatively new concept, so investors will likely continue to proceed cautiously, as the metaverse offers a unique way to diversify your portfolios, but they might consider it ill-advised to shift all their investments from physical real estate to virtual properties.
Final Words
Next year promises to be another exciting year in real estate, and technology will play a major role.
As with the shutdowns during the pandemic, though, real estate professionals should be open to new technology and try to understand how it could increase their efficiency, efficacy and bottom line. Otherwise, they risk being pushed out of the market by those willing to adopt tech tools.
SOURCE: FORBES
In the ever-evolving real estate industry, technology continues to shape and redefine the way we buy, sell, and invest in properties. As we approach 2023, several tech trends are expected to dominate the real estate landscape, revolutionizing the way stakeholders operate
7 Of The Most Profitable Real Estate Investments In The World
Here are 7 of the most profitable real estate investments in the world:
1. Multifamily homes. Multifamily homes, such as apartment buildings, can be a great way to generate income. You can rent out units to tenants on a monthly basis, and the rent payments can help you cover your mortgage, taxes, and other expenses.
2. Single-family homes. Single-family homes can also be a profitable investment. However, they are not as liquid as multifamily homes, meaning they may be more difficult to sell if you need to cash out.
3. Commercial real estate. Commercial real estate, such as office buildings, retail stores, and warehouses, can be a very profitable investment. However, it is important to do your research and choose a property in a location with high demand.
4. Real estate investment trusts (REITs). REITs are companies that own and operate income-producing real estate. They can be a good way to invest in real estate without having to deal with the hassle of owning and managing property directly. REITs pay dividends to their shareholders, which can provide a steady stream of income.
5. Apartment complexes. Apartment complexes can be a great way to generate income, especially in high-demand areas. However, they can also be expensive to purchase and manage.
6. Storage units. Storage units are a growing trend in real estate investing. They are in high demand, and they can be a relatively inexpensive way to invest in real estate.
7. Industrial properties. Industrial properties, such as warehouses and distribution centres, are in high demand due to the growth of e-commerce. They can be a good way to generate income, but they can also be expensive to purchase and manage.