Ray Kurzweil, a leading American inventor, thinker, and prophet, described a world in The Singularity is Near: When Humans Transcend Biology: after 2045, artificial intelligence will completely surpass human intelligence in most fields, and human work and life scenarios will be continuously digitized, becoming the ‘food’ for intelligent machines. Especially with the passage of time, artificial intelligence will continuously upgrade and iterate, more in line with people's daily needs, and ultimately benefit human society.
At present, it is the starting stage of the intelligent era. With the rapid development of new technologies such as artificial intelligence, the Internet of Things, and AR/VR, real estate technology has become an inevitable trend in the development of the overall environment. How will artificial intelligence be applied to the field of commercial real estate in the face of the highly intelligent development of big data?
In 2019, Shanghai Shazamtech Co., Ltd. (hereinafter referred to as ‘Shazamtech’) was attempting to provide solutions to assist in asset management of commercial real estate through technological means.
Shazamtech Empowers Asset Management with Technology
According to the latest statistics from CBRE, the transaction amount of bulk investment in Chinese commercial real estate exceeded 260 billion RMB in 2018, setting a historical record. Among them, the total investment of foreign investment in domestic bulk commercial real estate exceeded 85 billion RMB, a significant increase of 68% year-on-year. By the first quarter of 2019, the Shanghai commercial real estate bulk trading market continued the market heat of 2018, recording a total of 9 bulk transactions with a total transaction amount of 23.94 billion RMB, a year-on-year increase of 92.78%; Among them, there were 3 transactions involving foreign investment, with a total transaction amount of nearly 10 billion RMB, reaching a new high in the first quarter of a decade.
The report of WorldUnion pointed out that among all types of transactions, office properties have become the most favored bulk trading properties. In 2018, office properties accounted for 40.3% of the total transactions, followed by retail businesses accounting for 19.4%. As one of the pioneers in the field of technology asset management, Shazamtech has for the first time applied artificial intelligence and Internet of Things technology to the field of commercial real estate asset management, focusing on creating an office ecosystem and using technological means to enhance the value of commercial real estate assets.
‘The globally renowned real estate fund Blackstone adheres to the logic of ‘Buy’, ‘Repair’, and ‘Exit’ in commercial real estate, among which ‘Repair’ is asset management. By investing in capital improvement, upgrading building quality, hiring professional teams for investment, operation, and property management services, the experience of tenants can be improved, thereby enhancing the premium capability of assets. In the final financial statements, it reflects the increase in net operating income and asset value of assets. Now, with the advancement of technology, the combination of traditional asset management and technology has also given birth to a new category - ‘Technology Asset Management’, which is also the track chosen by Shazamtech.’
△ Shared by Hailang Liu, CEO of Shanghai Shazamtech Co., Ltd.
CEO of Shazamtech, Hailang Liu told reporters that China's current commercial real estate market has entered the stock era from the incremental era. In the era of high inventory, ‘Technology Asset Management’ is different from the IT system of project management. Instead, it uses technological means to improve asset management efficiency, refine operations, achieve the goal of increasing resources and reducing costs, and ultimately enhance asset returns and value for asset managers.
In short, Shazamtech aims to enhance the value of commercial real estate assets through technological means. ‘In China, technology asset management is still a brand new field that needs to be explored. This is an excellent development opportunity for Shazamtech.’
Shazamtech Redefining ‘Technology Asset Management’
The rise of digital technology has made Hailang Liu, who has more than ten years of experience in service management in the frontline real estate field, see the necessity of technology in reshaping the real estate business model. Based on years of research and development capabilities, Shazamtech has independently developed a ‘Life of Everything’ solution. It is understood that the solution is to connect the property owners, property managers, enterprises, tenant personnel, and the building itself of the entire building ecosystem, allowing the building to have perception, self judgment, analysis, and control abilities like humans. Ultimately, the improvements and value advantages brought about by these behaviors will be reflected in the revenue of asset managers’ financial statements.
△ Shanghai Shazamtech Co., Ltd. Life of Everything Solution
‘The life cycle of commercial real estate generally includes five links: Investment, Financing, Construction, Management, and Retirement, among which ‘Management’ is asset management. Throughout the entire life cycle of a building, the vast majority of the time it exists in the form of inventory, so asset management is the biggest theme. The frequently mentioned smart buildings, IT system construction, and property informatization are all services for asset management.’ Hailang Liu told reporters that real estate is one of the largest industries in China. If real estate and internet technology can be perfectly combined, the market prospects will be very promising.
However, technology asset management is not equivalent to real estate IT systems. ‘Whether it's from the perspective of design ideas, product value, data sources, problem-solving, or comparison between end users and decision makers, there are significant differences between the two.’ Hailang Liu said that if you stand from the customer's perspective, you will find that the current inventory pressure of real estate is very high. Therefore, ‘Operation Is the King’ has replaced the previous ‘Product Is the King’, ‘Channel Is the King’, and ‘Configuration Is the King’, and real estate asset management has entered a new stage of refined operation.
‘Technology asset management is a very segmented field. From the perspective of design ideas, the real estate IT system is a KPI perspective from top to bottom. Achieving goals through assessment is actually strengthening management through IT means and empowering management; And our product philosophy is a bottom-up perspective based on OKR, with a greater focus on the project assets themselves, which is technology empowerment. In terms of product value, IT systems aim to achieve paperless informatization and digitization, while our products aim to enhance asset value. There is a fundamental difference between the two. In addition, the IT system requires manual data entry, and our data comes from IoT devices, third-party data, algorithm model data, and a very small amount of manual data; The decision-making user of the IT system is the boss, and the end user is the employee; But the vast majority of frontline employees in companies who contribute to asset revenue do not want to use software that is not helpful to their work, time-consuming, laborious, and not helpful! This is also the reason why many leaders and decision-makers of commercial real estate developers have spent a lot of money on developing an IT system, but the frequency of use is extremely low, and even it is basically abandoned later on.’ Hailang Liu detailed the differences between the real estate IT system and technology asset management to the reporter, and once again emphasized that Shazamtech is not about solving internal IT system problems for customers, but about solving asset value problems for customers.
Nowadays, the commercial real estate industry is facing new reforms, and commercial real estate developers have a strong sense of crisis. Various types of real estate technology are gradually being accepted and recognized. Based on this environment, using technological means to help commercial real estate holders enhance asset value will also be the only way for commercial real estate developers to develop asset management in the future.
‘Technology asset management is a new track, and if our technology asset management can enhance asset value, there will definitely be a market. As one of the pioneers in the technology field of technology asset management, in the coming years, we hope to have the opportunity to help 20% forward-looking commercial real estate developers outperform 80% of their competitors in the same industry.’
‘This article is transferred from China Enterprise News’