The advent of technology is bringing exceptional changes to businesses across the globe. The companies today are preparing themselves to advance in the direction of Artificial Intelligence (AI). In India, with new sectors such as e-commerce, logistics and warehousing, fintech and startups gaining traction, we are likely to see more of such businesses beginning to implement automation into their products and workplaces moving forward. Following key takeaways were deduced after conducting an extensive research targeting technology and realty experts across key cities, like, Chennai, NCR, Pune, and Mumbai:
Technology, media and creative industries are likely to become key sources of demand for new space
Boundaries will blur between different segments of the property market and there will be an increasing shift towards mixed-use buildings
Both offices and industrial units are likely to become smaller, with industrial units moving closer to sources of demand
Demand for dynamically managed logistics warehouses will strengthen further
Internet of Things (IoT) will transform buildings and building management
Urbanisation will accelerate, as heavy manufacturing and agricultural jobs are replaced
Investment capital will migrate towards established sources of human talent, especially university cities
As per Colliers Research, the impact of AI on property market is likely to be vast. The advent of AI is expected to trigger an increase in urbanisation due to the replacement of heavy manufacturing and agricultural jobs. Likewise, migration of investment capital is likely to move towards established sources of human talent in upcoming years. In our opinion, trends such as drones, 3D printers, location analytics, virtual reality tools, Building Management System (BMS), etc. in construction and real estate activities should shape the future of real estate industry. AI is also expected to complement human roles, however will not replace them altogether.
“Although automation seems to be a threat for future office demand, the healthy market scenario at present indicates that the influence of AI will not be clearly visible in short-to-medium term. However, to strategise the long-term plans, companies should start preparing themselves for a world of automation from now. Flexible and intelligent office spaces providing a shared environment within buildings where automated systems communicate seamlessly will be the ideal workspace for the Gen Y and Gen Z workforce in the years to come. Especially, with international players foraying into the market, the commercial developers need to be innovative in their service offerings to add value to their client and remain in the game” said Joe Verghese, Managing Director, Colliers International India.
Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India, said, “given the ever changing/evolving economic and business environment, it is imperative for organisations to constantly look at more efficient or smarter ways of doing business; constantly review existing processes and look at reducing turn-around and response time. From a real estate perspective, it is imperative to look at reducing cost and at the same time creating a differentiator by introducing automation in building management systems”. Colliers research also deduced that the recent innovations in technology comprising AI, digitisation, big data, virtual reality are influencing the way we are working in our offices and will continue to do so in future as well. Regarding changing office spaces, the demand for new spaces is to be driven by technology companies, media and creative industries. Both offices and industrial units are likely to become smaller, with industrial units shifting closer to sources of demand. “Firms also need to be viewed as ‘in tune with the times’, ‘future ready’ and ‘next generation, technology friendly’ to attract talent and high-tech enterprise clients” added Sachdev.
As per Colliers Research, the future offices are expected to use space more efficiently, have more collaborative space, be dynamic, and feature more highly trained staff. Although AI and automation are perceived as a long-run threat to the demand for space, it should also support high-value human roles, and help drive productivity. Hence, futuristic companies should embrace AI quickly and invest substantially in increasing the workforce skills and prepare their human resources for higher-value core roles. Meanwhile, developers should aim for a diversified portfolio and flexibility of built spaces as high rents, and poor infrastructure is likely to pose a greater risk to property markets than automation. The concerted impact of business expansions due to new product development and the indispensability of humans in business processes should continue to drive office space demand in the next 5 to 10 years. However, to embrace this growth, we would need the skilled workforce and supportive infrastructure capable of coping with this change. Our recent survey with technology occupiers revealed that talent acquisition is the most important factor for companies to decide on their expansion strategy. Thus, India needs to invest heavily in skill development and infrastructure to embrace the growth that AI can bring to the country.