Technology, media and creative industries are likely to become key sources of demand for new space. Also, boundaries will blur between different segments of the property market and there will be an increasing shift towards mixed-use buildings, Colliers Research said in its latest research report today.
As per Colliers Research, the impact of Artificial Intelligence (AI) on the 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 the coming years. In fact, trends such as drones, 3D printers, location analytics, virtual reality tools, Building Management System (BMS), etc. in construction and real estate activities may shape the future of the real estate sector.
“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 the short-to-medium term. However, to strategise the long-term plans, companies should start preparing themselves for a world of automation from now,” says Joe Verghese, managing director, Colliers International India.
He says that 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.
Ritesh Sachdev, senior executive director-occupier services at Colliers International India, says, “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.”
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 are 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.