At this juncture when government focus is to build smart cities across India, we are entering into an exciting and critical phase in real estate development where we have to redesign our built environment. The smart city has a capability to transform the life and living of its resident as they are efficiently managed cities which increase the quality of life. These automated systems help save time and energy and make life easy and cost effective for the residents. In India it will take time to really create these cities as this would require a large amount of capital, planning and latest technology.
While the government has recently allocated approximately $1.2 billion for fiscal year 2014-15 and promoting foreign investment in smart cities, it will require cost effective advance technology. For countries like India, the starting point of building smart cities can be development of smart building concept in India. Large Funding through private investors and abroad and supporting government policies will drive the business case for smart buildings in India.
Currently, the perception is that smart building technology is expensive and unique but markets can transform in a very short amount of time, with smart buildings quickly going from being unique to being standard practice.
The advantage of following smart building concept is that they can be considered as future-proofed assets. As a smart building is energy efficient and operational effective building that integrates major building systems on a common platform and share information and functionality between systems. They use clean energy and emit less carbon emissions thus can be referred as ‘future-proofed’ against changing government policies and shifting tenant demands as tenants increasingly understand the benefits of smart buildings. Tenants who understand the benefits of smart buildings may prefer them over competing conventional stock.
Good smart building performance can also be seen as an indicator of building quality, and a commitment to good management practices. Buildings that are more attractive to tenants can also enjoy stronger tenant retention and shorter lease up and vacancy periods. Moreover, reduced Costs, efficiency in energy and water consumption can reduce out goings, which can either be retained or used to incentivise tenants. Given that it can be difficult to change the design of a new building once development is advanced, it is important to be prepared for a rapidly changing market.
For developers in India, as smart building is somewhat a newer model, knowledge can be money. Generally, adopting with smart buildings concept take time and developer has to go through a learning process. Those who will invest in learning quickly will comprehensively find that dealing with smart buildings becomes easy with time and that they can actually drive down the costs of doing so and increase their returns. The expertise and depth of experience of their design and development team will be instrumental in managing costs for developers. The technologies and design approaches of smart buildings and their ability to perform in operation have now been demonstrated in various locations around the world. It is now just a matter of how this knowledge is shared and adapted.
With the focus of government on creating smart cities across India, the businesses have to be prepared for rapid transformation. The shift to smart buildings has only just begun, and will now accelerate very quickly with pro-active govt. support. It is the time for forward-thinking developers and landlords to prepare themselves to lead, rather than follow, the change
About the author
Surabhi Arora, leads the research team in India and has more than13 years of experience in carrying out multi-disciplinary research and analysis in the area of finance and real estate industry. Surabhi specialises in real estate economics, policies, commercial and residential real estate research with in-depth knowledge of market dynamics across major markets in India.