Commercial real estate (CRE) might not be the first thing that comes to mind when we hear “metaverse”. Its definition is quite literally “real” estate, immobile assets that can be touched, in the real world. Major companies are taking big bets on metaverse with the hope that this new sector will become the next hotspot for real estate investors and users.
Having become more prominent since Facebook’s name change to Meta, the term ‘metaverse’ is still complex and difficult to define succinctly. It can be understood as a virtual shared space, combining aspects of social networking, online games, augmented reality (AR), virtual reality (VR), and cryptocurrency.
Currently, there are hundreds of companies worldwide participating in the development of the metaverse platform, technology, tools, and solutions like SandBox, Nvidia, Meta, Decentraland, and Vietnamese gaming unicorn Sky Mavis. Depending on each platform users who want to participate will need to have a login account, equipped with supporting devices such as glasses and networked motion sensors. Then, instead of surfing the web through screens, metaverse users will be able to “enter” the virtual world to experience shopping, meet friends and family, go to concerts, and possibly even complete administrative paperwork in the near future.
Non-Fungible Token (NFT) is a type of digital asset figuring artwork, goods, or real estate. An NFT is created through blockchain technology and cannot be copied or replaced. In terms of real estate, each land of the metaverse is represented by the NFT and can be sold on the open market. Real estate of the metaverse let investors showcase, sell, and organize events without the limitations of physical space.
In April, Standard Chartered Bank announced on their website the purchase of a virtual land plot on the gaming platform The Sandbox, with the aim of creating novel experiences for customers. Several global companies such as HSBC, JP Morgan and Adidas have also entered the virtual playground in this way. A report on the metaverse by Citibank has stated that the metaverse market will reach 5 billion users with a value of up to 13 billion USD by 2030.
Metaverse is a potential niche of the virtual office market, also known as the officeverse. A virtual office is a space simulating the actual area and has facilities such as meeting rooms, tables and chairs, writing boards, projectors and even a cafeteria. This might just be the answer companies are looking for to still promote company culture and collaboration, amid heightened demand from employees for a hybrid working model involving more remote work.
Meta, the parent company of Facebook and Instagram, recently launched the virtual office platform Workroom, which uses virtual reality technology to build office spaces that allow colleagues wearing virtual reality glasses to sit next to each other, hold face-to-face meetings even though they're actually halfway around the world. The lowest price for a dedicated Meta Quest 2 glasses also made by Meta is nearly $400, according to the company's sales website.
Glasses are being used mainly for entertainment purposes such as playing games, surfing the web, and watching movies.
The industrial real estate sector is also gaining traction. BMW owns a virtual "twin" factory, which simulates the actual production line on Nvidia company's Omniverse platform. This virtual factory is operated in real-time, used to monitor the progress, and simulate the working journey of engineers, workers, and even robots before putting into real production operation to optimize the process to the highest level.
For the retail industry, Metaverse is the intersection of real and virtual life and is opening up unexplored networking opportunities for buyers and sellers. Users can experience shopping conveniences such as trying on clothes, hairstyles, designing their own fashion, etc. Big brands like Nike are operating virtual stores to allow customers to interact with products and even celebrity athletes like LeBron James in their exclusive events. Recently, Estee Lauder brand participated in the Fashion Week on the DecentraLand platform to promote and gift participant of a bottle of NFT "serum" that can give the look of a glow on the user's avatar.
Some governments, such as the Singapore government, are monitoring and researching the characteristics of the virtual universe, to provide legal barriers to protect users such as ensuring online safety, privacy and intellectual property. According to CNBC, the Korean government is investing 177.1 million USD to invest in virtual space research and creating a metaverse platform that can provide administrative services to its people. However, Metaverse is still in a nascent state, and participation comes with risk, especially in terms of cyber security like cyberattacks, data, and identity theft.
Ms. Trang Bui, Country of Cushman & Wakefield Vietnam shared: “Although Metaverse offers many potential benefits, it still has many unanswered questions. This technology will probably become the second Internet phenomenon when it is widely applied to change user behavior and really bring benefits to life. So far, it's too early to know who benefits from this bet, but surely the virtual universe contains countless opportunities waiting to be discovered, from retail and brand promotion to raising the bar, experience for real spaces like hotels, restaurants, offices, and even industrial factories and warehouses.”
More articles are on our latest The Edge Magazine | Vol 7