By NUR HANANI AZMAN / Pic By ARIF KARTONO
COMMERCIAL real estate (CRE) companies should prioritise tenants’ and end users’ needs, due to the increasing influence of technology and changing customer preferences.
According to Deloitte’s 2020 Commercial Real Estate Outlook, tenant preferences are changing, with experience being the top priority, and that Internet of Things (IoT) and artificial intelligence (AI) technologies can raise operational efficiency and lower costs.
Real estate tax leader of Deloitte Malaysia Chia Swee How said, with the advancement of mobility technology, one does not need a fixed workstation to connect with co-workers.
“Given the increasing number of people working from home or satellite offices, we expect the demand for smaller/flexible and IoT-enabled offices in Malaysia to increase significantly over the next three to five years” he said in a statement last week.
Deloitte’s economists raised concerns about the growing volatility of the global economy. Globally, politics are expected to weigh heavily on trade, investments and equity markets. Despite these macroeconomic concerns, the CRE industry seems on solid footing to attract capital.
“If there is a downturn, the short- to medium-term challenge is expected to be budgetary pressures weighing against the requirement to make technology investments. The most-needed investments would emphasise digitising the tenant experience, together with back-end operations enhancements to enable bottom-line efficiencies, and top-line growth in the longer term,” the firm said.
Meanwhile, Jimmy Lai, real estate leader of Deloitte Malaysia said in Asia Pacific, CRE executives are aiming to increase their smart building portfolios, largely due to rising urbanisation and large-scale investments in new technologies and greenfield developments.
“Based on the recent Deloitte 2020 CRE outlook survey, tenants are willing to pay a rental premium to be housed in smart buildings. In the current quiet retail and office space market in Malaysia, it has become urgent for CRE companies to reinvent their buildings with digital tenant experience to stay vital.
“CRE owners and operators can use data analytics to assess tenant/end-user preferences, improve predictive capabilities and offer unique experiences to every user,” he added.
According to Deloitte, AI can reshape tenant experience by increasing the ease and frequency of interactions with both tenants and end users, add more agility in core business processes and drive operational efficiency. The technology’s predictive capabilities for any business decision can have a strong influence on profitability and returns, it added.