Over the last year, we have seen the adoption and integration of technology become persistent and far more widespread than ever before. The real estate industry was heading toward digitising processes and services, but the need to digitally evolve has become vastly apparent in the wake of the Covid-19 which has profoundly shifted the way the market operates. The main focus for property businesses across the globe, in all markets such as VC, Consultancy and Start ups is to embrace and deliver game changing essential tech. Those who have adapted accordingly and adopted tech will have transformative results as it becomes a necessity.
Co-founder of LMRE Brad Bartlett and Head of UK PropTech Consultant James Gershfield discuss the Proptech solutions that are revolutionising the traditional property industry and the major shifts and developments both have coming across since making the transition themselves.
Real Estate is the oldest asset class in the world and it hasn’t gone unnoticed that the property industry has been old fashioned and archaic in comparison to other industries for a long period of time. We often hear it being labelled a slow mover, and the need for PropTech is clear to improve solutions and take advantage of the data being gathered.
New technologies being applied specifically to property, are bringing changes to all aspects of real estate, from commercial, residential, construction, building management, investment and data collection. It comes down to efficiency, the number of people that are in traditional property that need to analyse data to sell to find the target customer is changing. Proptech allows companies to analyse data more efficiently. Efficiency is key for all companies at this point.
From a valuation, asset management and property management perspective, many of the larger companies have been operating in a very old school way for a long period of time and are now seeing the benefits of digitising their products. Using technology, proptech platforms and start ups, who offer tech to carry out valuations, asset management and property management can all be done much quicker and more efficiently to drive the costs down, streamline processes and become more proactive. It's been a long time coming and has taken a while to get to where it is now.
The proptech industry isn't far from the start line but it is certainly picking up pace and it is the large organisations that are starting to see that there is a huge benefit by using a digital platform within their business.
There has been a clear widespread interest within the whole sector. There's greater awareness of how different tech products across property, whether that be construction or commercial real estate are hugely benefiting those who use them, becoming must-haves products rather than nice to have.
The digital aspects of real estate have changed from days in agency, where you would be spending time valuing assets and looking at the whole comparable evidence of what else is out there to then hone in on the right value for any asset within commercial, residential and industrial. Now, however there are numerous platforms out there that can value assets instantly based on data that is already there, it's plugging all those insights from different real estate assets to value something in a much shorter and efficient time frame which ultimately leads people to more client and customer success.
On the logical side of property, selling is done face to face, people still buy from people. There are areas that can become more efficient such as agencies and commercial who can move away from having shop fronts to become more cost conscious.
From a recruitment point of view, we've seen those with sales experience come at a major premium, if you can sell proptech we would estimate salaries have jumped 15 or 20% in the last six months alone.
We see a lot of clients that use businesses who operate in a way that combines digital transformation and the right people, and it's those businesses who have both working together to complement each other who will become front runners in the sector across the next three to five years.
Agents need to think ahead and start to offer something different, such as a platform that does virtual viewings where you don't have to take a couple of hours out of your day to go and see numerous properties, those are the types of businesses that will engage a wider audience and profit greatly.
It depends on the complexity of the product and goes back to the previous question, sales is relationship driven. If you have the ability to get in front of the right people and build meaningful relationships then you will see the benefit across the industries.
We speak to many Proptech companies that need talent with real estate experience. Depending on who the target market is, if you can find someone that's been submerged in that space for a number of years, they know the target audience and they've built relationships have extensively researched the relevant technology, those are in high demand and are the people that start ups look for.
One to note is the tenant experience and engagement where you are able to communicate with your tenants. Whether it's safety measures about COVID or offers within the area there has been huge benefit in the addition of clear communication channels making it a must have for prime commercial real estate.
Another is the way the office space operates. Large companies and landlords across the UK are analysing their portfolio of real estate and companies who now look for more of a flexible solution to their office offering. Businesses are no longer signing the traditional 10 -15 year leases anymore.
Within these offices spaces, there has been a demand for products such as sensors that look at a real estate portfolio from a landlord perspective and ensure that they are offering that flexible office solution for when the workforce start returning to offices post covid as many companies will be qualifying the space that they currently use and if they can decrease any square footage. Then reviewing the advantages through the proptech platforms that analyse your asset. There has been a greater demand for products that manage footfall in offices to know if you are fully utilising the space. It will track the people in the office and see where they spend the majority of their day like a heat map.
It's about understanding consumer needs, whether it's the rise of hybrid work within commercial real estate, looking at how many times people are going to come to the office and what effect that has on surrounding retail. If you've only got 60% capacity can the retail businesses survive? Within the residential market, where do people want to live? More and more want outside space but what do they expect in their building in terms of safety?
The proptech industry is still relatively new and people are really getting to grips with it and understanding what it can offer, one of the biggest challenges for the market is for companies to fully acknowledge how well technology can be adopted and how much more efficient it makes people within the business and a business as a whole which in result will drive it forward.
Large consultancies such as CBRE, Savills, Knight Frank, JLL, Colliers, Cushman & Wakefield are all adopting tech and seeing huge benefits. Adoptoption of leading platforms such as Yardi, Coyote and VTS are now every day tools.
On the other hand, some boutique agencies who don't buy into the technology and are very much old school driven property owners or consultancies that don't believe it's going to add value to their business….fast forward two years if they haven't adopted tech then they will unfortunately lose competitive advantage and potentially fall by the wayside.
5% of real estate has adopted PropTech so far. Real estate will end up having to do this whether it's in 2 years or 20 years so why not start now? If companies aren’t adapting and simplifying their processes by using tech then they're not going to grow.
It is dependent where the candidate has come from, with Proptech products the tech is either built or it is sold and integrated so the first thing to do is look at the skills you have, can you build the product or build a strategy around how to sell it?
Coming over from property, a surveyor is traditionally suited to selling, integrating and managing the customer relationships. If you have a tech background you may be more focused on building the tech so it comes down to the individuals skill set and interests. These startups will be focused on different verticals and will have Product managers, engineers, Commercial and operational teams.
We have seen many tech candidates that come from out of industry on the implementation side that have been working in the Fintech for the last 6 to 7 years. They have noticed the real estate industry is such an exciting and expeditious one that's going through huge growth at the moment and want to be involved.
The industry is growing but it's good to be on the front foot, never leave it to tomorrow what you could do today.
What proptech product do you want to be involved in? What area of the industry interests you? There are lots different verticals whether that's residential, commercial, construction tech.
There are some really exciting start ups that are emerging in the market who offer equity and ESOP plans for their employees, when these companies grow and evolve and potentially IPO and sell you will receive a cut so the earlier so the sooner then better to make the move!
At LRME, we are 100% aligned to the Real Estate Tech and Innovation market, and are globally recognised within the PropTech space. Our specialist consultants know the market inside out and can help.
Are you a good salesman or account manager or are you on the tech implementation side? Where do you see yourself adding value into a business?
CVs can be very general but when a candidate tailors their CV for the next career move and to the company they are applying to they stand out head and shoulders over the other applicants. Those moving across from traditional agencies looking to break into Proptech, emphasise that in your CV you know the skill sets that you've had in your previous job and how you see those skills being transferable will differentiate yourself.