Proptech Changes Real Estate Industry
Real estate has not always been seen as the most technology-focused industry, but that is changing fast, the Urban Land Institute and law firm Goodwin said.
“Proptech has undeniably become essential to companies to maintain a competitive market position, with technologies being integrated in all business areas, including–meaningfully–providing the tools to address climate change and meeting environmental, social and governance commitments,” said ULI Global CEO Ed Walter.
ULI and Goodwin surveyed 200 people from around the world who are directly involved in their companies’ proptech adoption for a new report, Proptech: Changing the Way Real Estate is Done.
“This report drills down into how and in what areas companies have, in the last three years, integrated proptech into all aspects of their business, both strategically and throughout their operations, and their plans for the next three years,” Walter said. “The cloud, IoT, mobile devices and 5G have all opened the doors on the potential for innovation, but it is the application of this technology from the end users of proptech–real estate companies–that will shape the transformation of the industry over the next three years and beyond.”
Minta Kay, Chair of Goodwin’s Real Estate Industry Group and Co-Head of its PropTech Group, said proptech has become a critical competitive advantage driver in a very competitive real estate marketplace. “It has challenged the historic status quo and is driving impactful market change,” she said, noting proptech is spreading into different business segments in the industry, including management and financial streams, design and construction, leasing and tenant relations, wellness and climate change. “Technology is demonstrating that it has the power to impact the nature of our built environments,” she said.
Additional insights from the report include:
–The vast majority of companies are already experiencing the impact of technologies integrated across their businesses, with 80 percent of companies noting the positive impacts on operations and services and 70 percent experiencing a positive impact on decision-making and finances.
–Data analytics, property management and portfolio management are seeing the most benefit from recently adopted new technology, with capital raising lagging thus far.
–Interest is shifting dramatically to data analytics, project management and climate change, with companies indicating these will be key growth areas for their proptech adoption over the next three years.
–The pace of proptech adoption is set to increase over the next three years, with the leading companies pursing multiple strategies to remain ahead of the curve, including direct investment in technology companies, investment in venture capital funds and in-house technology development.
–Asked about goals in partnering with and/or investing in technology companies, 40 percent of companies are developing proprietary technology tools, 31 percent helping screen for high-impact new technologies and 16 percent diversifying overall investment strategy.
–Overall, only 15 percent of companies do not have plans for future investment and growth in technology adoption.