The number and variety of proptech companies have multiplied just in the last few years, and digital twins promise to play an important part in that movement. It is projected to be worth $35.8 billion in 2025, a huge leap from its $3.8 billion estimate in 2019, and is one of the fastest growing concepts of Industry 4.0.
What are digital twins?
Although digital twins as a concept is not new, they have become one of the top strategic tech trends only as recently as 2017. Digital twins are living digital models of physical spaces in real-time, based on operations and environmental data gathered from IoT sensors and devices. Manual input of data is eliminated, as the relationship between physical and virtual objects involve automatic data exchange which in turn enables better decision making and planning. In real estate, a digital twin is the virtual copy of a building, built within the walls of a software program but constantly updated with information from the physical space itself.
What Digital Twins bring to the table
According to a May 2021 whitepaper by EY, digital twins adoption can reduce real estate operating costs by up to 35%, accelerate risk assessment, reduce carbon emissions, boost healthier workplaces and improve user experience. Leaders who employ digital twin tech will be able to harness environmental factors like humidity, weather and temperature and how they affect properties and operational practices.
- They identify areas of inefficiency, thereby reducing construction and operational costs at the building stage, and allow real estate companies to reduce existing environmental impact and lower energy costs.
- Because of their capacity to grow with each stage of the real estate chain, digital twins will give real estate agents a more comprehensive and accurate view of what properties have to offer, as well as how they can be presented. Take virtual tours, for example - now practically a staple in every agent’s post-pandemic toolbox. Digital twins gather data through IoT sensors, allowing agents and RE firms to provide truly immersive and detailed virtual tours that surpass previous technology. They can also be valuable in virtual staging; while agents conducting traditional staging would involve decorating, placing furniture, hiring a professional photographer for quality shots etc, those who leverage the capabilities of a digital twin can save both money and time because all that can be adjusted and produced many times over in a cost-efficient and engaging way.
- They will enable predictive maintenance and real-time remote monitoring - since IoT sensors produce real-time big data, RE players can analyze that data to work proactively and problem-solve more efficiently by using cloud solutions. Because they’re also accessible from anywhere, some authorized players will also be able to monitor and control performances remotely.
- They can equip agents with a powerful inventory of a property’s history and information, presenting significant ROI potential. Digital agents will now be able to monitor buildings at a structural level and ensure a property meets regulations, all the way to the minute details, (identifying a certain light switch that keeps going off etc). Agents are able to present a plethora of data-backed information to clients that would otherwise normally take a lot of paperwork and man hours. The digital twin eliminates all that and instead collates all necessary data into one comprehensive report that is editable and available at any given time.
- They can address the problem of disparate data silos - segregated data is everywhere, but poses a challenge especially in real estate. Different buildings and different stakeholders means data is kept in different formats and locations - and digital twins are starting to remedy that issue by providing a more centralized portfolio of properties.
While these are just a few examples of the incredible capabilities of the digital twin, there are still obstacles to overcome. They’re time-consuming to set up, require training to use properly, (even more so at the teams-level), can be costly, and will need periodic updating as technologies evolve. There is also the issue of access - currently a lot of digital twin information is privately generated or owned, (some is even controlled at a federal level). Nevertheless, its fast-growing adoption is undeniable, in real estate and many other industries too, and explains why Gartner projects that by next year, over two-thirds of companies that have implemented IoT will have deployed at least one digital twin in production.
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