It’s widely acknowledged within the commercial real estate industry that successful innovation is vital to gaining and maintaining a competitive advantage. Delivering that innovation, however, requires meaningful investment in unfamiliar and untested products, services, businesses and people.
As part of London Tech Week, I was invited by London law firm Bristows to join a panel discussion on the convergence of technology and the real commercial real estate sector, in which we explored the areas most likely to drive transformational change.
The discussion was split into two discrete areas - “intelligent buildings” and “proptech” – each of which, it soon became clear, were united by a common topic.
Data, it appears, is key.
Sebastian Abigail, Senior Director of VTS, reminded us of one important fact: 90 percent of the world’s data was created in the last two years. He kicked off the event by praising the property industry for taking the first steps to become a “digital first industry”. However he caveating this by saying that we are only currently standing at the precipice of a full proptech revolution. There is still far more to come.
In a separate discussion by the proptech panel on the implications of Brexit, it was argued that with the current uncertainty in the markets, landlords need ways to differentiate themselves to tenants. Supporting this assertion, Dr Chlump Chatkupt, founder of PlaceMake.io, suggested that “in times of flux, we need more data.”
James Crawford, assistant director at Deloitte Real Estate, argued that a “building can’t be called an ‘intelligent building’ until it does something meaningful with data”.
By way of illustration, James presented a few of the exciting features of The Edge in Amsterdam, which is considered the “smartest building in the world”. By using a smartphone app, The Edge checks your schedule, knows your preferences for light and temperature, and finds a desk for you as part of the “hot desking” system.
While the industry is making great advancements with smart building technology, James concluded that buildings cannot yet “think” with the data they have, which will be the next phase in the evolution of smart buildings.
Through increased use of algorithms and analytics, not only can landlords, building managers, and agents use big data for greater insight into the requirements and behaviour of potential tenants, but they can also offer those tenants more relevant and detailed returns on their property searches.
Indeed, the general consensus of the proptech panel was that proptech products which educate the landlord on what tenants want will always benefit the tenant. Unfortunately, many landlords feel that they do not currently spend enough time with their tenants in order to gauge their working preferences. Proptech products which use big data analytics can inform the landlords of tenants’ needs, allowing landlords to be proactive in responding to tenant demand on issues such as lighting, temperature, amenities, and connectivity.
With 5G around the corner, it’s an exciting time to consider how data will be critical in the industry’s ambition to create “intelligent buildings”. It’s also great to see that proptech products are starting to get at the core of what tenants want, with new products in data analytics helping landlords understand what matters most to their tenants.
London Tech Week was a fantastic opportunity for the property industry to reflect on where the industry is, and where we would like it to be in the next five years. This year’s event in particular proves that the property industry has made great leaps in its relationship with technology, and I look forward to seeing where we are in 2018.