4 reasons why real estate investors should also consider digital infrastructure

Real estate has been slow in terms of digital transformation, which is the use of digital technologies in the different aspects of a business. Among these digital technologies are data analytics, artificial intelligence, and mixed reality, and it is only in the past couple of years that this industry is leveraging these innovations. Yes, the real estate industry is trending towards digitalization and it is something real estate investors must take into account moving forward because they will have to ride the wave of the changing times.

In particular, real estate investors will need to not only use existing digital infrastructure, but also invest in it. Digital infrastructure refers to physical assets such as data centers, fiber optic cables, subsea cables, cell sites, and macro towers. These enable connectivity and are, thus, foundational to both digital transformation and the digital economy. By creating appropriate zones for these digital real assets and working with digital companies for the building of infrastructure, real estate developers can help ensure fast and reliable connectivity for their communities and support digital economies.

With that being said, here are 4 reasons why today’s digital infrastructure ought to be top of mind for every real estate investor.

Digital Infrastructure Is Fundamental to Society

Over the years, the role of digital infrastructure in society has been growing, and this role has only gotten bigger in the past couple of years. Critically, the COVID-19 pandemic has underpinned why having adequate and high-quality digital infrastructure is vital to any and all societies.

Among other things, digital infrastructure enables communities to stay informed through media sources, lets families and friends connect with one another, and makes homeworking viable. It has even kept economies afloat during this pandemic through eCommerce, all while making telehealth and distance learning possible.

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Needless to say, digital infrastructure will be indispensable to a fully functioning society moving forward, which is all the more reason for real estate investors to start including digital infrastructure in their planning and investing in it if possible. People will demand it, and investors must be able to give it.

Digital Infrastructure Will Be in High Demand

Since digital infrastructure is beyond fundamental to a society, it follows that demand for it will keep increasing. Consider: Blended learning—the mix of face-to-face interaction and virtual classes—is forecast to be part of post-pandemic life, while eCommerce is predicted to grow even bigger in the coming years. Internet use as a whole is growing exponentially as well, with more and more people using it for work, school, entertainment, business, and so on.

Here are some statistics that underscore why digital infrastructure will be in high demand in the future:

  • By 2025, there will be 38.6 billion connected devices through the Internet of Things—up from only 22 billion in 2018.
  • Devices worldwide will be consuming 74 zettabytes of data by the end of 2021 and 149 zettabytes by the end of 2024. That translates to a more than 50% increase in only three years, or a 3,600% increase between 2010 and 2021 and a 7,350% rise between 2010 and 2024.
  • Needless to say, it is crucial that real estate investors keep up with this projected increase in digital infrastructure demand, and the way to do it is by investing in it now.

    Digital Infrastructure Can Unlock a More Equitable Future for Many

    Regardless of who builds them, digital infrastructure will be built—in greater numbers, in more locations, and with increasing sophistication. This alone will translate to wide-ranging job generation, with digital infrastructure projects estimated to provide high-paying employment to hundreds of people.

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    But the benefits do not stop there. Tech leaders and telecommunication companies will be incentivized to either help put up digital infrastructure training programs or support academic institutions in strengthening their technology-related offerings. This assistance can then ensure a robust talent pipeline of graduates with the technical knowhow and digital skills to take on jobs related to digitization and digital transformation.

    Among the fields that will have high demand for digital-savvy workers are hardware design, network security, solutions, cloud computing, and applications development. Critically, jobs in these fields are some of the highest paying, with hardware design engineers making an average of $102,000 annually, network security specialists making $113,000 yearly, and cloud engineers making $123,000 per year. More people with higher paying jobs will only be a boon for the real estate industry, as that means more people will have money to buy property.

    Digital Infrastructure Is Key to Digital Transformation

    Industries need to digitally transform if they are to reap the benefits of the digital solutions already mentioned. Having the right digital infrastructure will allow the real estate industry to accelerate this digital transformation, enabling it to keep up with other digitally transforming industries, like manufacturing, healthcare, and finance.

    Digital transformation can, in turn, open up more opportunities to real estate investors, not only locally but also internationally through enhanced connectivity. It will also automate repetitive tasks and paperwork that will then free up time for more value-adding work. It will even improve business processes within the industry, enabling better efficiency, quicker turnaround times, and improved data-gathering methodologies.

    Of course, getting real estate investors to consider digital infrastructure is easier said than done. But change is good and necessary, and it is something that real estate investors must be open to.

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