How location intelligence drives real estate investments?

Conducting research and assessing investment opportunities in real estate is not a cakewalk. Whether it is the valuation of an investment space for retail or hospitality purpose, it is crucial to consider all social-economic factors in the given area to ensure high returns. Location intelligence plays a crucial role here. It helps investors know complete details about the area, demographics and buying preferences of customers before taking the plunge.

Nowadays, many developers, particularly in the retail segment, leverage modern technologies and databases to gather information about a prospective investment site. What has gained immense popularity is the location data and intelligence that provides granular insights about the venue, the foot traffic trends, demographic and behaviour patterns of people living or visiting the area. Realistically speaking, all these insights are hard to gather from traditional data sources, as most data sources do not look into accurate foot traffic analysis or actions in the real-time/real world. Thus, real estate firms rely on location intelligence to make informed business decisions:

Insights on consumer demographics: With the help of location intelligence, businesses can get insights into consumer demographics via cross-referencing anonymous devices to census block groups. Based on the information garnered, one can understand the typical demographic of the prospective investment area and verify if the investment matches the needs and wants of the customers and will it be a lucrative deal.

Site selection for projects: While we have discussed consumer demographics, it is also crucial to look into foot traffic analysis when you talk about the overall strategy. Tapping into the areas that customers frequently visit and researching the trends and patterns of movement that occur around these areas of interest is essential. 

For example, if you are interested in a shopping plaza, gaining historical location data and analysis can help you in uncovering critical numbers regarding the visitors, their length and time of visit, and also the number of times the consumers end up visiting the shopping complex.

Detection of neighbourhood trends: Another essential benefit of location intelligence is that it helps firms spot neighbourhood trends much ahead of the curve. This accelerates the investment decision, and firms can leverage the first-mover advantage.

For example, location intelligence can help detect whether a neighbourhood is starting to gentrify or, conversely, if the area trends are not in line with the investment thesis. Understanding an area’s demographics mean that you know the people who live and shop in a given neighbourhood, and you are leasing properties to stores that match the profiles of the shoppers. This, of course, ensures a greater success rate for the store as well as more income for the landlord.

Analysis of competition: Geofencing can help get a sense of footfall in your competitor’s store and gauge the loyalty levels. This can lead to valuable insights. For example, you can discover a popular location of a competitor and decide to invest in property nearby to capitalise on the available foot traffic.

With more real estate firms beginning to understand the value that location intelligence can add to businesses, many developers, particularly in the retail sector, leverage the technology.

Investing in the right area that fulfils all criteria can help a real estate investor become a primary player in the industry and stay ahead of the game. Thus, it is worthy of investing in location intelligence so that you can leverage real-world data, meet the challenges in the industry and prevail.

Originally published at 99acres.com