PropTech: real estate with some extra tech
Real estate, a constant topic of conversation at dinner parties but the talk is more focused on price rather than real estate technology. So let’s pause, reflect and learn something new about real estate: Property Technology or ‘PropTech’.
The global PropTech industry is predicted to be worth over US$20 billion by 2020 and our 2018 Global Proptech survey revealed 93 percent of industry respondents felt traditional real estate companies can no longer avoid becoming engaged in the PropTech landscape.
But what exactly is it?
PropTech is broadly described as a new wave of services operating at the intersection of real estate and technology. This essentially encompasses two main areas:
First is the foundation layer; the part of the construction process that is typically low-tech and centred on trades. Think hi-vis and hard hats.
For example, embedded sensors on a connected worksite can collect and manage information relating to safety, construction delivery and building performance.
Domestic firms are making waves in this area. Australian company Ynomia developed in collaboration with CSIRO utilises proprietary BLEAT (Bluetooth Low Energy Awareness Tracking) sensors, for resource and supply chain tracking. This technology provides real time, automated, location-based insights on three key ingredients dictating project success: labour, machinery and materials. Tracking these in real time makes the construction process more efficient and in the long run lowers occupancy costs and increases yields.
The second layer is the real estate and hospitality layer. This is where new technologies increase operational efficiencies and heighten customer experience, which in turn maximises returns on the underlying investment. Australian companies have already developed client communication apps for landlords, which facilitate a demand-based and efficient provision of services for their tenants across commercial and residential properties.
Other domestic firms continue to innovate building energy management systems (BEMS) which traditionally only regulated energy usage but are now essentially IoT ecosystems, allowing for the control and partial automation of many aspects of building maintenance. With increasing interoperability of systems manufactured by different companies, buildings can communicate through technology, sharing data – and their conversations will amount to a more efficient provision of services.
PropTech has the potential to power growth in the real estate and construction sectors but its adoption is slow. It boils down to the idiosyncratic, relatively low-tech and complex nature of the real estate and construction value chain. However the emergence of new leaders with high brand recognition such as Airbnb or Regus and the fact new technology is producing positive results means recognition of the sector is growing.
Companies are now starting to display a real willingness to learn and collaborate by working directly with researchers and founders to develop strategies capitalising on emerging technologies, pioneer value and ultimately lead to adoption.