Why the kingdom is ripe for a tech revolution in the real estate sector
Known as the ‘golden asset industry’ in any geography, real estate is the go-to investment preference in Thailand.
The country has recorded high growth in the real estate domain amid growing spending power in the ASEAN region. In a changing scenario of competition, unpredictable markets, and inter-linkages with the tourism industry, the real estate market is more dynamic than ever.
In this game, competition is as cutthroat as it infamously is. Internet of Things (IoT) is steadily turning out to be a game-changer. This technology is revolutionary and offers cutting-edge innovations. IoT enhances the connectivity of our physical world.
Bird’s eye view: Thailand’s real estate market and its changing scenarios
The upcoming times will bring important moderations to the Thailand property market, slow growth in many sectors, and an incoming wave of new supply.
The competition for increasingly rare sites is still hot with the increase in land prices and scarcity of free land in prime places. Yet, with new regulations and a new Bangkok City plan ordained to come to effect in 2020, developers are taking a step back to assess the situation.
IoT and real estate in Thailand: the crucial link
IoT may not seem very relevant in an industry like real estate, which depends more on raw materials like cement, concrete, and steel. But a closer look reveals that IoT is practically changing the way things are done in the sector. Customers are changing preferences and driving demand and transactions. In the near future, businesses will see IoT playing an increasingly relevant and pertinent role.
Thailand is no stranger to the latest innovations in the technology fields that are building the growth of real estate spaces. There is considerable advancement in devices and sensors that are being employed to capture data. This is pushing real estate providers to create distinct value for customers by integrating smart solutions that have control over various systems at homes and offices.
In the Thai market, a major shift has been noticed in real estate consumer behavior. We see the transfer of decision-making power from Generation X to the millennials. The so-called ‘new Thai generation’ is driven by a buy-to-let lifestyle, seeking investment opportunities in real estate early, and consequently driving technology-enabled services in the real estate space.
Data is relatively cheaper in Thailand than China or the west, and almost anyone who is earning a living is using a smartphone with the internet. It’s all set to revolutionise the real estate sector.
How IoT serves the Thai real estate sector
- IoT makes real estate spaces smart
In Thailand, clients are looking for automated solutions to perform their daily chores and make their lives easier. For example, a smart HVAC (heating, ventilation, and air conditioning) system at home could sense the optimum usage temperature and remember the tenant’s schedule; it automatically starts before the tenant enters the home. This will help in improving user experience and give a boost in building an efficient system operation. This also reaps better economic results.
Likewise, a smart security system could help ensure safety by sensing and critically analysing regular activities in the house and inform the user of any change or discrepancy.
- IoT has considerable impact on energy efficiency
In Thailand where energy distribution is a matter of concern, IoT plays a key role in recording the energy consumption patterns of systems and can initiate early maintenance, ensuring smooth operations. It can be enforced to automate building maintenance services and enable engineers to track operations of machines like elevators, HVAC systems, and lighting equipment by capturing data like operating time, idle time, and maintenance cycle.
Powered by analytics, smart devices and sensors can record the pattern of operation and indicate the need for maintenance whenever it is due, i.e. either in the case of irregularity or when predictive maintenance runs. This can be interpreted as a tangible benefit (e.g. operational cost reduction) and intangible benefit (e.g. smooth operations).
- IoT is helping in making decisions faster
The booming Thai retail industry is seeking smart spaces to track the influx of customers. This will process clarity in the areas where customers spend the most time and which parts of the store get the highest footfall. A finer understanding of the operations will assist the retailer to make decisions regarding the design of the store as well as stocking of merchandise.
Manufacturers and warehouse operators are also excited about the concept of the smart workspace, which will help them to monitor the supply chain with a closer look into the inventory levels, people, and machine performance on the floor.
IoT could also impact the individual home buyers by adapting beacon technology. Residential properties could now become beacons that are able to send push notifications to potential buyers.
The way forward
The difficulty in achieving interoperability of devices, however, is hindering businesses to tap the maximum potential of IoT. To make interoperability a reality, it should be a prerequisite to integrate various systems, devices, and vendors.
There always is a threat of privacy infringement due to the abundance of user data, which may lead to a reluctance from tenants to introduce IoT solutions. Real estate must strategise to reduce such risk with the right measures.
IoT will require more in the real estate value chain and need huge investments, direct and indirect. The real estate industry will eventually embed IoT, which will drive the way businesses will operate here on.
Marciano Birjmohun is the Managing Director of DMRD Real Estate consultancy and a Director on the board of the Singapore-Thai Chambers of Commerce. He also serves on the panel of judges at the upcoming PropertyGuru Thailand Property Awards. Nominations are open to the industry and the public until 7 June. Visit http://www.asiapropertyawards.com/nomination/thailand/ for more details
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