New-age tech labs are sprouting in cities, a blockchain district is on the cards. A look at how technology is set to positively impact the realty industry.
The tech industry’s great new hopes – artificial intelligence (AI), big data and blockchain – are making their presence felt in an unexpected new field: Indian real estate. As the world starts to rely more on these innovations, India is catching up, and making room.
There are AI labs coming up in established tech hubs like Bengaluru and surprise destinations like Kolkata. Now, Hyderabad is set to house India’s first blockchain district. Experts point out that this signals an impending boost for the housing market there.
Samantak Das, chief economist and head of research at real-esate consultancy JLL India says that any big tech disruption is bound to have a long-term positive impact on the economy and real estate, particularly the residential market. “We have seen that right from the 1980s with the computerisation of the banking system,” he says. Cities which adopted digital systems early, like Bengaluru and Chennai, gained significantly. Late-movers like Kolkata were left behind in the tech-enabled service industry and still lag behind in the real estate market, he points out.
“The aim is to create new employment, support startups, and make Telangana and India the blockchain capital of the world,” says Rajesh Dhuddu, global practice leader, blockchain at Tech Mahindra.
Private-public partnerships like this are crucial for the growth of fields like AI in India, believes Khurshed Gandhi, managing director, consulting services at realty services firm Cushman & Wakefield. “After 2016, big players like United States, United Kingdom and China have come out with a policy on artificial intelligence (which has positioned them as the global leaders in both research and industry according to the Stanford Institute for Human-Centered Artificial Intelligence),” he says. “We still don’t have a comprehensive policy. These areas will require a lot of investment in research but private companies are too focused on profit, that is where the government needs to come in,” he says.
This kind of clustering helps industries big and small leverage their strengths and collaborate. Government subsidies and infrastructure plans become easier to implement, small firms can pool in and share overheads. It also helps in creating ecosystem with allied industries in an area. Das however points that infrastructure like traffic management needs to be worked out in advance or else the crippling traffic woes of Whitefield in Bengaluru or Bandra Kurla Complex in Mumbai will be repeated.
The higher intensity of work also requires a different approach to planning space and this means that a blockchain, AI centre or even a data lab might require a far bigger space, says Najeeb Khan, head of design and business strategy, India and Middle East, tech-forward construction company, Katerra. “A blockhain or AI office has to be different from a BPO office. In a BPO design there is around 60 square feet allocated per person, for blockchain it will be much higher because it is a large-scale innovation lab which involves multiple machines. It is something like a sophisticated factory. Moreover, the kind of workforce we are looking at in an AI office is also different. It is highly skilled and will devote a huge number of hours. So the design needs to make them feel at home and at ease,” he says.
The city stands to gain
Das admits that there are apprehensions of job losses with artificial intelligence in the short term. but he explains that this will only be to replace them with newer jobs like machine trainers who will write algorithm for the machines or explainers who will be the bridge between machines and humans. “There is also a possibility that these jobs will be of a higher level, contributing to the entire economic chain in a better way,” he says.
As far as an immediate impact of the blockchain district on the realty landscape of Hyderabad is concerned, it depends on where the land is allocated, says Gandhi.
“Hyderabad now has one major market which is the west of the city in Gadchibowli and HITEC City. Land is very expensive here, so my guess is that the government might push this initiative towards east or south. In that case, they will not make much of a difference to the west market but it will surely increase the east and south by 15-20% gradually,” he says.