real estate

5 Big Questions Redefining Real Estate Strategies In 2024

Navigating disruptions and uncertainties has become a normal practice in the dynamic sector of real estate, especially in the post-COVID era. From concerns over the productivity of modern hybrid workforce to analysing the challenges associated with artificial intelligence to the ongoing conundrum of what to do with office buildings that are heading for obsolescence, investors and occupiers have a lot on their minds for the year of 2024. In this article, we will discuss some of the biggest issues facing the real estate industry this year.

  1. Is Hybrid Model Really Working?

After spending years experimenting with the hybrid work model, many companies across the world are now worrying that this new-age model just isn’t delivering the goods. More and more firms are encouraging their employees to return to the offices in order to boost the overall productivity which is dropping in Hybrid work schedules.

However,  there are conflicting issues from an employee’s standpoint. A majority of the modern workforce believes they remain more productive at home. Usual disturbances and lack of privacy in the workplace are two of the significant reasons why employees don’t want to work from the office. To address this problem, the companies need to create more collaborative workspaces that deliver what’s needed for a Hybrid workforce.

  1. Will AI Change From Hype To Habit?

Artificial Intelligence, and the future it has come to represent, has already taken the world by storm. With the emergence of brilliant AI tools, the Proptech industry has expanded on the back of growth expectations. In fact, several big investors, developers and occupiers are confident enough that AI will be the game changer for the real estate industry in the coming years.

It is becoming the norm to use AI technology to ease up the work of complex data, whether financial, contractual, or the vast datasets generated by smart buildings. But as the initial excitement wears off, businesses across the world are grappling with how to fully harness this new technology to fuel their future goals.

As the use of AI has become very common these days, firms should be mindful of the various AI regulations that continue to emerge across different sectors. 

  1. Will There Be Enough Net Zero Offices?

Being ‘net-zero’ means balancing the carbon emissions we produce and when a building is ‘net-zero’ it implies that it’s no longer adding to the levels of greenhouse gases in our atmosphere. With the rising awareness of green and sustainable buildings, the demand for commercial spaces that helps organizations meet their net zero carbon (NZC) goals has increased. But the problem here is that there’s just not enough space, particularly in the office industry, to accommodate everyone.

In the U.S., the supply of low-carbon workspaces will be 57 million square feet short by 2030, according to the reports, while no cities in the Asia Pacific region will have adequate supply. And if you take the stats into account, this gap between supply and demand of net zero spaces is only set to widen.

However, it’s also generating opportunities for forward-thinking developers to consider retrofitting existing office buildings with the prospect of high rental rates in the short-term and protecting the overall value in the long-term.  

  1. What Next For Real Estate Investment?

The commercial real estate investment is in its early stage of significant reallocation of capital. Those sectors which are currently out of favor, will see a place for global and diversified portfolios in the near future. The investors will be needing to act with agility and have real-time market connectivity to steal their spot in this competitive market. 

  1. Will Investors Become Conversion Converts?

While office vacancy rates have reached an all-time high and housing shortages abound, investors and landlords are questioning what to do with buildings that have passed their prime. Therefore, converting these spaces into apartments, luxury hotels, data centres or even vertical farms has become an attractive option.

With several buildings now out of date and not generating suitable yields, conversions are increasingly on the cards. This emerging business for adaptive reuse strategies is also boosting confidence of investors to gain bigger financial rewards in the future. 

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