10 May 2022
using ar glasses

How will the metaverse shape the future of construction and real estate?

Authors
Martin Ceccon

Head of EY-Parthenon Strategy | EY Switzerland

With a background in Environmental Natural Science from ETH Zürich and leading the strategy practice of EY, Martin is passionate to drive sustainability as business opportunity for companies.

Benjamin Banusch

Disruptive Technologies Lead Switzerland

Experienced Technology Strategy Advisor, supporting organizations to face the opportunities and implications of emerging technologies such as DLT/Crypto Assets and Quantum Computing.

10 May 2022

Web 3.0 is redefining how we co-develop and co-design our built and virtual spaces, shaking up the reality of business and society alike.

In brief
  • “Meta estate” is one direction for the future of the construction and real estate (CRE) industry
  • Web 3.0 will boost opportunities for architects, construction companies and related players alike
  • Are you ready to embrace the new reality?

As the metaverse takes shape and begins to mirror and enhance all aspects of real life, industries are seeking ways to turn disruption into opportunity. Besides impacting consumer goods, entertainment and other sectors, the metaverse is also changing the face of the construction and real estate (CRE) space by transforming our understanding of co-development and co-design, spaces, businesses and societies.

Opportunity

$800bn

Projected global metaverse revenue by 2024, according to Bloomberg.

Web 3.0 is supporting a shift from “read and write” to “limitless creativity and participation”, making the metaverse a truly transformative lever. And it’s set to be a lucrative transformation for organizations that get on board. According to Bloomberg, the global revenue opportunity in the metaverse is set to reach as much as $800 billion by 2024 alone. Innovative initiatives are booming across the metaverse and often involve players in the CRE value chain. Examples include city co-development and co-design, as we’ve seen in Singapore, or enhanced city development as initiated by the University of Pretoria. In addition, we observe a trend toward co-development and co-design based on building information modelling (BIM) and digital twin in a more immersive way, but also through the trade of virtual land and CRE assets such as architectural designs and real houses using non-fungible tokens (NFTs). The areas where we see the most impact are:

  • NFTs to commercialize CRE assets

    The CRE sector already takes advantage of NFTs to leverage both physical and digital assets, from selling architectural designs or real houses based on NFTs, to fragmenting ownership of real estate through smart contracts.

  • Immersive digital twins to optimize urban development

    The metaverse will boost collaboration and move today’s digital twins from providing real-time virtual models of urban fabric to enabling immersive development and design that helps avoid costly planning errors and implementations and post-production adaptations.

  • Innovative CRE to co-design and co-develop

    The future of CRE business relations will include virtual collaboration, moving from today’s BIM collaboration and common data environments enhanced by mixed reality to an immersive experience from co-design to co-experience across the value chain to final transactions. Additionally, CRE collaboration is integrated with blockchain-backed construction contract management for an additional level of security.

  • Virtual spaces to support users’ avatars and brands

    The CRE industry has an important role to play in the metaverse in terms of enabling users’ avatars lives and helping companies build their virtual presence. CRE players will assume a decisive role in moving from real buildings to enhanced virtual customer experiences empowered by virtual spaces, including a new understanding of offices, stores and living environment.

While these opportunities are clearly very promising, they are also associated with various challenges, especially as many companies are exploring uncharted territories. The journey to success starts with having the right strategic direction, focus and priorities, followed by building and leveraging your own capabilities in combination with ecosystem partners. Finally, there has to be an appetite to jump into the unknown.

How do you build a roadmap to success?

Start with where to play. Consider how the metaverse impacts your current offering and where there’s potential for new opportunities. Decide on attractive growth pockets, by understanding the market dynamics, new consumer journeys and sweet spots against competing market offerings. Deciding where to play is about choosing the right bet for your specific business.

Continue with how to win. To develop a winning go-to-market strategy and business model for the metaverse, you need to understand the new dynamics, winning practices and actionable journeys. For most organizations, entering the metaverse means breaking new ground and you will need to find new ways to engage with customers. This brings us to the next question: what capabilities are needed? Which of these do you already have in house, and where can you upskill? How can you leverage your network and who are the right collaboration partners to complement your position in the metaverse ecosystem?

So, are you ready to jump in and make your first move? The CRE sector – like many others – has already started to embrace the new opportunities offered by the metaverse. Early adopters stand to benefit first, and fastest.

Summary

In the best sense of Amara’s law, we tend to overestimate the impact of technology in the short-term and underestimate the effect in the long run. The metaverse will have a massive impact on CRE by redefining ecosystems and the way players operate within them. We at EY-Parthenon have already supported companies with their metaverse strategies and would be happy to share our insights to accompany you on your journey.

About this article

Authors
Martin Ceccon

Head of EY-Parthenon Strategy | EY Switzerland

With a background in Environmental Natural Science from ETH Zürich and leading the strategy practice of EY, Martin is passionate to drive sustainability as business opportunity for companies.

Benjamin Banusch

Disruptive Technologies Lead Switzerland

Experienced Technology Strategy Advisor, supporting organizations to face the opportunities and implications of emerging technologies such as DLT/Crypto Assets and Quantum Computing.