Whether you invest in companies with a focus on property technology (PropTech) or you use technology to improve your business, the proptech industry will affect your real estate business as well as your competitor business.
What is proptech?
Some describe it as the startup technology for real estate while others are referring to the technology itself. The technology includes both software and hardware. Software includes property portals like Zoopla and Rightmove, and hardware includes things like sensors. Then there are cool proptech material, such as for example special bricks that act like batteries to power solar panels. Innovative companies are drawing excitement with each new technological possibility within the real estate sector.
PropTech gain popularity beyond just being known as a niche phenomenon. Venture capital investments in proptech soared from 186 million USD globally in 2011 to 12 billion USD in 2017, according to Forbes. Though it is still small compared to Fintech, the technology is still having a positive impact on real estate properties.
Proptech can be used to bring saving and efficiency to slow and bureaucratic ways to getting business done. Whether it is used as alternative infrastructure for things such as agreements (engaging a contractor or property sale through the use of smart contracts), transactions (faster payments) or data exchange (secure and reliable customer data or credit checks) real estate professionals are excited about the efficiency and of course savings this technology can offer the industry.
There are four crucial areas that will be affected by the digital transformation and emergence of proptech as an asset class. This includes data, processes, property, and investment strategy.
Very few real estate players have a single point of truth for their data warehouse. Between interface breaches and recurring need for reconciliation your staff attention is generally focused on fixing these issues instead of proactively using data to make better portfolio decisions and finding new sources of revenue.
PropTech can improve the automation of routine task and processes. Predictive analytics, virtual reality, drones are among the new technologies that can be used to optimize time, risk, and cost. Choose the right mix for your core business.
Attractiveness and flexibility of office and mixed-use properties are prerequisite for attracting top talent and having high performing assets. Smart Office, Smart Meter, and Sensor Technology prepares buildings to be connected to the world; however, social behavior, commuting considerations and long-term planning are property level considerations that plays a major role in tenant retention as well.
As technological innovation in proptech continues to take root in the industry, real estate business professionals, including owners and investors, will need to continuously evaluate an integrated technology solution as part of their business strategy to gain competitive advantage.
Depending on your need, proptech innovation can be used to improve your topline gains or to improve your bottom line savings. Real Estate leaders are looking for alliances, partnerships and solutions to support scalability of their business models to win their chosen market. Contact ReDev to see how we utilize technology to improve our portfolio performance.