Real estate is the largest asset class in the world. According to a Savills report, the total value of the world’s real estate reached US$280.6 trillion in 2018. Yet as an industry it remains largely untouched by digitalization – which means there's enormous potential waiting to be tapped into.
Gartner defines digitalization as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities”. Or to put it simply, it's the process of moving a business from analog to digital.
With this in mind we can begin to envision the sheer magnitude of untapped potential the real estate industry will offer once digitalization kicks in – automating processes, providing data-powered certainty, optimizing and creating new revenue streams to name just a few.
But what are the missing pieces? What needs to happen to propel the real estate industry into the digital era?
Digitization is a prerequisite for digitalization
By definition, digitalization implies the use of digital technologies and of native digital and digitized data. To understand how digitization works as a catalyst for digitalization we can draw parallels with other industries where it’s already happened.
Only after music was digitized into MP3s– and other digital formats – did revolutionary developments like the iPod and Spotify become possible, transforming how we access, listen to, share and make music (and the vast potential revenue streams these opportunities create).
In the retail sector, the jump from brick-and-mortar stores to eCommerce was only possible after product catalogs and inventory were digitized. 2020 serves as a perfect example of how important that digitalization has been to keeping retail going and, in many online cases, propelling it to new levels of profitability.
The real estate industry is no different. But there's one major blocker preventing it from reaping the benefits of this digitalization despite ongoing efforts – the physical world is not yet sufficiently digitized. With the vast majority of global real estate being built before the 1980s, only a minuscule fraction has been digitally documented. So far.
Most major players in the real estate industry have been gradually embracing digital technologies since the 1980s – think of Computer Assisted Design (CAD), Building Information Modelling (BIM) Virtual Design and Construction (VDC) and Geographic Information Systems (GIS). The stumbling block has been the inability (or inaction) to connect and render this digital data usable at an industry-wide level.
In recent years we have at last begun to witness tentative first steps towards real estate digitalization with the arrival of online property portals. And while these are undoubtedly playing an important role in making real estate inventory digitally available, the property data they include is often limited and not fully contextualized, which dramatically impacts their efficacy.
The missing piece of the puzzle
How then can we fast-forward the digitization of the built world and connect, harmonize and contextualize all the property data available today?
The answer is by using Digital Twins that consolidate multiple data sources and layers into a single entity.
A Digital Twin is a digital replica of a physical world feature – be it a single object like a park bench, an entire city or the world itself – with all associated data aggregated into it.
This data can include anything from potential and actual physical assets to processes, laws, places, systems and devices, all georeferenced to their physical world location and semantically segmented.
In the real estate realm, Digital Twin data includes everything from market data, zoning laws, building use regulations and building laws to transport and urban mobility systems, noise levels, sunlight exposure and almost any other industry-relevant information.
Each Digital Twin can cover a single unit, a city, a country or even the entire world. These invaluable tools are set to become a cornerstone of the Fourth Industrial Revolution, bringing together the physical and digital worlds to contextualize big data and render it visually, enabling better insights and decision-making.
From digitization to digitalization
The next step in digitalizing real estate is to take these Digital Twins online and in doing so make them available to – and usable by – real estate professionals.
By amalgamating them all into a single easy-to-use online platform, we unlock their myriad potential benefits and possibilities for everyone. Through this platform real estate players can objectively feel and measure the pulse of the market, gain certainty through data insights, find hidden investment opportunities and accelerate decision making using reliable and trusted automated processes.
At the same time, this platform facilitates collaboration by creating a common language every stakeholder can see and understand, whether they’re a developer, investor or anyone in between.
And it’s not just real estate professionals who get to reap the benefits. Digital Twins also create fantastic opportunities for software developers to build exciting new applications that will shape, simplify and improve the real estate industry in the same way they’ve been building apps for iPhones to shape every part of our lives.
The first Digital Twin platform for real estate
To help the industry take this leap forward and reap the benefits of digitalization, Nomoko has built the first Digital Twin web platform called "Praedia" dedicated to the real estate industry.
It connects, combines, contextualizes and leverages relevant spatial data like location intelligence, property prices, and legal data through a single, unified access point.
In its current version it includes tools to browse the Swiss market, identify and analyze investment opportunities and access detailed property information. As it develops it will grow to embrace other markets and expand its features and toolset.
Nomoko codesigned this Digital Twin platform with real estate professionals to make sure it helps them achieve their primary goals: to improve returns, gain data-driven certainty and automate processes.