We are now living in an era of game-changing digitized human activity. This is a significant point in time, which only a few decades ago was once thought impossible. Moreover, it may encompass opportunities we could never envision. For the real estate sector, when the name itself emphasizes "realness" and a certain level of immobility, it is even harder to imagine it mixing with alternative reality technology.
However, that does not prevent developers and operators of real estate services around the world from joining the game. In short, the Metaverse is a digital platform that offers a virtual environment that integrates Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) so that users can partake in and experience realistic encounters in realistic settings. It is a new way to consume information and experience virtual representations of people, places and things. The tech behind the metaverse is based on gaming technology—so effectively, it’s not new—but the metaverse has shed some of the gamification.
Armed with a screen, Virtual Reality or Augmented Reality device and a web connection, anyone can jump into the metaverse (in avatar form, of course), move through these new environments, find new and unique experiences, interact with virtual objects and, through shared experiences, connect with others who come from near, far and everywhere in between.
It is growing rapidly as well. According to Global Market Estimates, the global Metaverse market is expected to grow at a compound annual growth rate (CAGR) of 45.5% between 2022 and 2027.
For the office sector, the Metaverse can let enterprises build office spaces in the virtual world where their employees and clients can gather, work, collaborate, exchange ideas and conduct business. This also means the employees can work in an immersive, inspiring, effective, comprehensive and appealing way to work, without needing to be in the physical office all the time.
An example is Meta's Workrooms app, which allows employees to log into a virtual office, put on their virtual reality goggles, and chat with colleagues as if they were actually standing side by side. Although there are still many barriers to widespread adoption such as cost (the price of a pair of glasses can range from $US429 to $US1000, according to Meta), convenience, and professional necessity, there are still many development areas for the virtual offices as more and more people want to work remotely semi or full-time, and companies expand the geographic scope of talent recruitment.
For retail, the Metaverse could allow shopping centre landlords and operators and retailers to design and build virtual retail spaces for consumers to experience and shop. Brands want to use the metaverse to position themselves with a new audience and complement their strategies. Shoppers can try on the latest jeans, create custom sneakers, and then buy their favorites for their avatars. This is where the metaverse can intersect in real life, as consumers can also purchase these items in the physical world.
By understanding consumer behavior in the virtual world, the metaverse can offer a wealth of retail intelligence to brands, helping them to anticipate trends. K11, Adidas, Burberry, Gucci, Tommy Hilfiger, Nike, Samsung and Louis Vuitton are all examples of enterprises from the retail world that have built a virtual retail platform on the Metaverse. This help provide an immersive, stirring, effectual, all-embracing, alluring and convenient way for consumers to shop for either NFT-focused products or physical products.
For residential, the application is similar to retail where prospective buyers can tour a residential property and its vicinity within the Metaverse prior to making a home purchase in the physical world. This expands the pool of prospective residential property buyers given the fact a property tour within the Metaverse can be conducted from any part of the world that has adequate access to the Internet. This would be of benefit to real estate agents.
They can also allow architects, designers and homeowners to design a home within a realistic virtual world where aspects such as sunlight, weather, seasons and surroundings can all be accurately factored in in order to enhance the home’s aesthetics, reduce its energy and resource usage, heighten its health and safety and augment its level of wellness, wellbeing and liveability.
For the hotel industry, virtual reality tours of a hotel’s facilities by permitting prospective guests to visit the hotel with an avatar at the hotel booking stage. Moreover, existing guests could be provided admission to virtual hotel venues to hold meetings or events;
But this could mean a lot more than just virtual hotel visits. Allow hotels and event organisers to develop and execute counterpart events for networking, workshops, seminars, conferences and forums, accessible worldwide and with no need for attendees and speakers to travel.
With this, outgoings related to business travel are expected to be somewhat cannibalised. According to Euromonitor International, globally, 274 million business trips could be lost by 2027 and possibly US$36 billion of in-person business travel expenditure could be moved to virtual business travel events and activities within the Metaverse.
For the industrial sector, companies like Siemens have successfully created effectual digital twins of industrial space, be it factory space or logistics warehouse space, allowing for industrial equipment repairs to be carried out remotely by qualified and experienced engineers living in other regions and away from an affected industrial space. In addition, metaverse technology needs a lot of computer power and memory to operate, thereby accelerating the development speed and scale of data centers around the world.
Most new technologies, before changing the world, will have to go through a long development process to perfect their functions and reach mass adoptions, for example: Internet, mobile technology, and most recently, AI technology - artificial intelligence. Before ChatGPT explode, AI had to go through decades of development and testing before we can see it applied in so many aspects of life like today.
We predict the story of the metaverse will play out similarly, especially in the real estate sector, as more and more major players like Alphabet (Google's parent company), Meta (Facebook's parent company) and Microsoft are continuously researching and investing to bring this technology to entertainment, work and daily life. And like every technology race in history, the beneficiaries will be those who can access and apply technology most effectively and quickly, and the ones that are slow to adapt or deny the opportunity to change will soon be left behind.
View the latest Markebeat from Cushman & Wakefield >> HCMC Q4 2022 Marketbeat