Proptech, as a fast and dynamically growing industry, attracts startups and investors around the world. PropTech trends bring changes to Real Estate. Roughly one year ago, we wrote about the state of digital transformation in Real Estate. Back then, we could see already good pilot projects, where young companies and associates are working together. But, the scaling was still missing.
Now, nine months into this very special 2020, we want to review the changes and trends in PropTech. In this blog, we will capture some topics worth having a look on. Some of them have been impacting the industry already before COVID, others simply developed out of the changing circumstances.
Big data & Machine learning
Collecting and sorting of information is a good start. But to get the best out of your data, you need to understand it’s meaning for your business. The challenge in real estate is to identify the data’s full potential. Artificial intelligence (AI) helps you to analyze information. But the insights are only useful if they bring added value to your operations.
Machine learning-based, cognitive computing is being applied with the expectation that the science of artificial intelligence will supplant the art of, old-fashioned site selection and yield better outcomes. Since economic growth has slowed down considerably in the last few months, investors need to look harder to capitalize on the new value. Machine learning (ML), business intelligence (BI) and AI are proven technologies that will help you.
Machine learning algorithms can intake huge amounts of data, process all of it to find patterns in home value, and then return highly accurate valuations for homes in a relatively short period. The hidden value in disconnected data sources can be brought together and analyzed so that real estate buyers and investors can use the actionable insights taken from these to decide where to invest next.
Proptech is also increasingly helping commercial real estate owner/operators to adjust to new traffic patterns in a COVID world. For example, AI can help retailers determinate where to open new locations based on traffic patterns.
The workplace as we know it
Is work ever going to be the same anymore? Office requirements have changed, with larger areas for individuals to work in and less fixed desks. Plenty of Proptech solution becoming essential components to safe and seamless office operations. One particular goal for the landlords is to provide a solution that helps to convince tenants that the office is a safe work environment.
There are solution gathering anonymized data about spatial use within offices. Tenants can reconfigure their office layouts to prevent the clustering of employees in common areas and rebalance floor plans to take advantage of underutilized spaces. The communication between building owners, tenants and employees will also be crucial. Can we post the community activities within buildings or complexes? Tech can help to simply see which meeting room has been cleaned or which office space is occupied.
Booking software can help you as well prevent overcrowding. You can book an office space from the comfort of wherever. And only when you are a user with a current booking you are able to enter the building. Technologies that reduce the need for human contact will be the clear winner, be they gesture-based building controls, platforms that eliminate the need for any human contact in real estate transactions, or technology that enables safety and social distancing on construction sites.
Remote technology
Startups that simplify processes by reducing the need for face-to-face interactions or digitizing physical processes. Those have had the opportunity to shine. We have learned how to use remote technologies. Corporates are showing an increased interest in technology which allows them to work “normally” despite the pandemic. This is already possible by using software for e.g. managing prospects, remotely executing leases online, provide reporting or signing contracts online – just to name a view.
We can have virtual tours by using our phones in order to enable leasing to continue remotely. Corporates are offering tenant experience platforms and we can generate 3D space plans. And there is also an increased demand from investors looking to source and assess property development opportunities remotely.
New remote work themes are infinite. Community and communications, wellness, operations-oriented technologies, data and business intelligence solutions or tooling that plays to the further institutionalization of real estate.
Digital Leadership
Leadership need time, onsite or digital. Due to COVID, many real estate leaders had to rethink management models. On the one hand, it was keeping business as usual and on the other hand, it was the balancing act in getting digital enough to support employees best. And yes, Proptech has been supporting teams already before 2020, but it is now that we realize the full potential.
Technology helps you to enable remote work and to get your team connected. And you need to understand that people adapt in different ways to remote work and technology.
We have learned to have job interviews online and have hired people we have never met in person before. We became much aware of the fact that great talent is not limited to one location but can be onboarded from everywhere.
And we have started to use offices in different ways. Leaders understood that there is not just the option of working at home or being at the office. There is also something in between where tech can help us increase sustainability and decrease travelling.
ESG
Environmental, Social and Governance (ESG) issues are becoming increasingly important to real estate investors. In addition to risk and return, ESG will be a key criterion for investment decisions in the future. There is a growing seismic shift in how they’re thinking about the future and our responsibilities as we finance tomorrow’s real estate innovations. The world is mandating that we get smarter about the real estate sector’s environmental footprint. And this is an enormous opportunity for those in the property innovation space.
As part of the ESG regulation of the financial sector, the European Union is also tightening the sustainability requirements for the real estate industry. EU is currently preparing a comprehensive package of measures, which will gradually come into force, starting in March 2021.
Check a property’s condition, analyse problems and schedule fixes as well as engaging with residents. These are just some examples to monitor ESG criteria. PropTech is playing a significant role in smart building software, data, and reporting.
And note: On September 22nd, we will arrange a webinar around the topic of ESG. We want to speak about practical ways of defining clear KPIs for ESG and of mining and structuring data to calculate them.
Save the date!
