Real Estate Digitization, How To Find New Value Chains
Abstract: People and architecture can have a brand new relationship. Smart parks are a deep fusion of human, machine, and material things. They are an organic living organism and a sustainable development space. Architecture is lifeless and can last for a hundred years, but building systems have life and can thrive.
After 20 years of rapid development, the domestic real estate industry has become a huge market driven by high economic growth and urbanization. After experiencing the wave of urbanization, the urban spatial structure is gradually developing and optimizing.
According to data from Haitong Securities Research Institute, the growth of net population value outside first and second tier cities has basically stopped; At the same time, the transaction volume of second-hand houses in popular first and second tier cities is exceeding that of new houses. With the transformation of population structure, saturation of housing demand, and slowing urbanization, the demand for new housing has been compressed, driving the stock of houses into the era of second-hand houses. In the past two years, the gradual and medium to long-term economic development environment in finance has to some extent suppressed the growth of housing.
All of this seems to signify:
China's real estate industry has entered the post development era.
In the current context of smart cities, basic building functions are no longer able to provide new competitiveness, and the traditional real estate industry is facing an urgent need for "upgrading and replacement". However, the more "heavyweight" industries are, the more difficult it is to transform, but once they start, it is easy to achieve significant results - like an elephant dancing.
In recent years, we have also observed an unprecedented and urgent demand for scene digitization in the real estate industry. With the continuous innovation of Internet and digital technology, as well as the promotion of 5G, IoT and other technologies, more and more real estate enterprises have joined the layout camp of "smart real estate", eager to drive the intelligent landing of the whole scene of real estate through the digital road. The implementation of scene digitization requires both the support of digital technology and experts who understand industry scenarios, making Huawei a favored partner for many real estate enterprises.
1. The turning point of the post development era
At the end of 2016, more than 60 real estate company chairmen from the Zhongcheng Alliance gathered together to reach a consensus: with the end of 2016 as the watershed, the previous era was the "development era" of real estate, and the following era was the "post development era" of real estate.”。
The products of the development era are singular - only for residential use, rather than a comprehensive supply of real estate products. In the era of development, real estate innovation depends on three conditions: scale, cost, and speed, that is, who sells larger, who sells faster, and whose cost is lower.
In the past 20 years, land prices have been rising almost every year, and most real estate companies have benefited from this economic growth cycle. The population aggregation in first tier city clusters has made housing a rigid demand, and housing prices continue to soar. Even in second - and third tier cities, the intensification of urbanization has led to a continuous rise in housing prices. Real estate developers only need to follow traditional business logic to acquire land at low cost, build buildings on a large scale, and sell at the fastest speed to earn money.
After experiencing the madness of the past 20 years, in fact, most areas of China are no longer scarce in housing, and the demographic dividend is gradually disappearing. The real estate industry has entered a stage of mutual competition from the stage of jointly expanding the cake. Competitive enterprises are gradually emerging at this time, and top enterprises may compete for the share of other enterprises, marking the entry of the real estate industry into the post development era.
The competitiveness of the post development era has shifted - no longer competing in scale, cost, and speed, the product line has become increasingly diverse, from single format residential, commercial, and apartment buildings, to complex multi format TOD (public transportation oriented development model) complexes, CAZ (central activity area), and urban operations, all of which need to be included in the product scope of enterprises.
Wang Hui, General Manager of Huawei's China Government Enterprise Business Department, referred to the post development era of the real estate industry as the "low fault tolerance period". In his view, companies need to achieve a turnaround in development models, sales strategies, transaction models, and revenue structures. To successfully complete these four transformations, real estate enterprises need to transition from a traditional enterprise to a smart enterprise, and digital transformation is the best path for real estate enterprises.
Traditional real estate companies are good at "building houses" and may not know where to start with the later value operation brought by "digitization". Therefore, in order to successfully transform, an expert who understands both technology and industry scenarios is needed. Therefore, Huawei has become one of the important builders of the transformation stage. Building a stage for industry transformation requires a methodology, which is industry standards. But in China, the standard field of digitalization in the real estate industry is still in a developing stage.
In order to further expand and explore the field of real estate technology, Huawei has conducted a comprehensive review and research on its own real estate technology business and related markets, and jointly released Huawei's first digital white paper on the real estate industry with E-House Kerry. The white paper covers seven major fields related to real estate technology, conducting targeted interviews and questionnaire surveys on the top 50 real estate companies, top 30 property companies, and over 30 technology companies in three rounds, and comprehensively analyzing the application scenarios and core technologies of digital real estate.
At this year's Huawei China Real Estate Industry Digitalization Summit, Huawei also reached cooperation with 20 companies and established the Huawei Real Estate Industry Ecological Alliance. We can see that Huawei is continuing the "platform+ecosystem" approach, providing platform interfaces, and opening up research and development capabilities, testing, and verification environments to partners. Based on the platform, new ICT technologies are being ecologically coordinated with real estate enterprises. In this case, real estate companies can choose to explore transformation space in the platform and ecosystem provided by Huawei, and find follow-up value chains.
2. The challenge of finding the value chain
For traditional enterprises, searching for the subsequent value chain when digitalization approaches is always tortuous.
What challenges may real estate companies face from digitalization in subsequent platforms and ecosystems? The core lies in three aspects.
1. Traditional IT architecture is no longer able to cope with rapid market changes and business upgrade needs.
2. The industrial scale continues to grow, and real estate enterprises need more effective operating models.
3. Market competition has put forward higher requirements for customer service capabilities. As the proportion of assets held continues to increase, the importance of revitalizing assets and improving asset returns is also increasing;
In Wang Hui's view, the digital transformation of real estate enterprises requires three core competencies:
Service: Supported by digitization, providing a rich variety of services for families, communities, parks, and cities.
Operation: refers to the digitization of real estate enterprise management. By combining digital technology and platforms, a new operational framework and process are established to enhance the comprehensive operational capabilities of enterprises from multiple dimensions such as operational refinement, digital control, and product standardization.
Asset Management: Starting from the perspectives of fund management and asset management, we aim to create a highly liquid, low leverage, and profitable asset portfolio to improve investment returns.
It can be seen that all three core competencies have a high degree of dependence on data.
Michael Jansen, founder and CEO of Cityzenith, a well-known digital real estate company in the United States, once stated that cities have generated more data in the past two years than in the previous 200 years, with 95% of the data being unstructured and therefore underutilized or underutilized. Understanding, collecting, analyzing, and visualizing these data is one of the biggest challenges facing cities today.
In the era of smart real estate, data will be an important production factor. The new generation of digital infrastructure will turn data resources into "smart sources", which can effectively support the digital transformation of various scenarios towards intelligent upgrading, reconstructing experiences, optimizing processes, and enabling innovation. Whoever can play with data has powerful problem-solving abilities.
Based on this premise, Huawei has conducted a lot of in-depth research. Over the past five years, Huawei's over 200 digital transformation consultants have also delivered over 500 projects to over 300 clients, laying a solid foundation in the digital transformation of real estate.
In response to the challenges faced by the current digitization of real estate, Huawei has also proposed a "one body, two wings, and two engines" strategy to accelerate the process of industry transformation.
Integrated: A unified intelligent agent architecture, a new ICT architecture launched to integrate various digital technologies and stimulate business potential, reducing the complexity and cost of using digital technologies in the real estate industry, allowing real estate enterprises to focus on business innovation.
Two wings: One wing is the industry ecosystem, which reconstructs segmented scenarios through joint solutions with partners, helping the real estate industry solve practical problems; The other wing refers to the standardization of banks and enterprises, increasing investment in the field of standards to provide digital standards for the real estate industry to refer to.
Dual engine: The first engine refers to the intelligent enhancement of various products in the real estate industry, such as residential communities, commercial complexes, industrial parks, TOD, etc., through spatial intelligence, to enhance product strength; The second engine is business digitization, which connects the entire business chain of real estate enterprises from investment and expansion to operational services. Through data-driven and AI enabled optimization of business processes, it improves the operational efficiency of the entire enterprise.
This intelligent agent can be seen as a digital foundation for real estate digitization. It constructs an integrated intelligent system of cloud network edge end collaboration, which can help real estate enterprises form an open, compatible, stable and mature basic support technology system. It is a reference architecture for the digital transformation and upgrading of the real estate industry, and can support business innovation and application in all scenarios of the real estate industry.
3. The Digital and Temperature of Transformation
Nowadays, industrial parks are the basic building blocks of cities and important carriers of economic development and public services. Therefore, the technological empowerment of industrial parks is a key step in the development of smart cities.
In the future, the integration of industry and city is the trend, and the future smart park is also a fusion space. This fusion is not only the fusion of the entire scene, but also the fusion of physical space and digital space, which is the space of digital twins. The construction of smart parks is based on the digital twin space, achieving comprehensive perception, ubiquitous connectivity, active services, and intelligent evolution.
The Guangzhou Guigu Science and Technology Park, jointly built by Huawei and Feiqi Internet, is a typical case of a smart park. Guangzhou Guigu Science and Technology Park is located in the core area of Science City CBD in Guangzhou Development Zone, and is a key industrial project in Guangzhou Development Zone. The park focuses on high-tech industries and strives to create an international science and technology innovation complex, building an international talent entrepreneurship community that integrates production, life, and ecology.
Huawei has proposed a design concept of "fully connected, fully integrated, and fully intelligent", and has upgraded the park to intelligence:
Intelligence: Through the overall 3D model of the park, the data information of the park can be visualized and comprehensively summarized. The 3D model can also be refined to specific buildings and floors to analyze and display relevant data information, achieving intelligent visual control.
Digitization: With the operator as the center, establish a core intelligent management platform, connect the platform with applications to government, enterprises, the public, and third-party service organizations, and achieve the informatization of park operation.
Ecologization: Through the construction of industrial ecology in the park and the accumulation of big data in the park, service efficiency is improved and an industrial service ecosystem is constructed.
The smallest unit of a smart park is a smart building, which is the cornerstone of the smart park; Smart buildings, on the other hand, are composed of individual spaces, and for real estate enterprises, the construction space is the manufacturing of products. Therefore, spatial intelligence is one of the core competitiveness of product strength for real estate enterprises.
In China, Huawei also has deep cooperation with Huajian, CNOOC, Vanke, Greenland, Poly, and others in multiple fields such as smart parks, smart communities, and smart homes, to enhance the core product strength of real estate enterprises through "4H".
Wang Hui has provided a detailed introduction to the overall concept of "4H":
Building an innovative whole house intelligent solution based on HiLink, combining multiple transmission technologies to form virtual terminals, achieving mutual device capability call and seamless information content flow.
The intelligent building 5A system based on Hlink reconstruction horizontally connects traditional weak electronic systems, reducing cost expenditures during the construction and operation periods of intelligent buildings.
Based on the rich smart park scenarios accumulated by HiCampus core, various data models and business models of parks can be accumulated and reused through real estate agents.
Building a smart city based on Huawei Smart City solution, it aggregates Huawei's end-to-end technology capabilities from management to cloud and chip, driving cities to become more intelligent through digital technology.
Wang Hui stated that in order to help enterprises and society achieve digitalization, we must first turn ourselves into fully connected intelligent enterprises and become a benchmark for traditional enterprise digital transformation. Huawei Park, based on intelligent scenario based applications, has achieved a 10% reduction in building power consumption, a 90% reduction in equipment and security false alarm rates, a 73% reduction in event response time, while reducing staff pressure and reducing labor costs such as park operation and maintenance, resulting in a 15-30% reduction in manpower.
Extending from architectural space to buildings, then to parks and cities, covering the entire urban operation system from the smallest module of buildings, it is not difficult to notice that the "4H" technology solution system's "ambition" is to adapt to the different needs of real estate enterprises while covering all living and working scenes in the city, redefining various types of spaces under the core concept of people-oriented.
In 2020, Dr. Su Baohua, President of Huawei Cloud&AI BG Smart Park Business Unit, pointed out that people and buildings can have a brand new relationship. Smart parks are a deep fusion of human, machine, and material things. They are an organic living organism and a sustainable development space. Architecture is lifeless and can last for a hundred years, but building systems have life and can thrive.
Nowadays, Huawei's cooperation with real estate companies is to build people-oriented smart buildings and create a warm and panoramic smart park while embracing technological innovation. True wisdom is not the accumulation of data resources, but the delineation of a smart, efficient, secure, green, and humane life.
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