- Simon Sinek
Jan 22, 2023
Put simply, PropTech is the use of technology to drive efficiencies in real estate, ultimately leading to improved asset returns, reduced friction, and greater transparency. Historically, real estate has lagged other industries in embracing Technology.
However, Real Estate is witnessing a paradigm shift, aided by implementation AI & launch of 5G, PropTech has the potential to disrupt the working of RE value chain on every step. Parallely investments in PropTech continue to rise with new vigour post the COVID pandemic.
What is innovation has been debated and there are multiple methods advocated for innovation. When we think of innovation the obvious options pop up, starting from Edward DeBono, Tony Busan, professor Clayton C in more recent past, then the theories like Open innovation , Blue Ocean, Six Hats, Disruptive Innovation come to mind. Indian origin stalwarts C.K. Pralhad and Govindrajan have championed Innovation too.
Real estate companies are pursuing digital investment and collaborating with PropTech for a variety of reasons which will ultimately result in shifting the balance of power in Real Estate from traditional developers to New Age Real Estate Companies embracing technology and having end to end capabilities. Here is an attempt to glance into the future of Real Estate disrupted by PropTech .
Development
Property Developers earlier made decisions by analysing traditional data such as occupancy rates or property prices and combining it with their personal intuition. However, improvements in big data analytics with race to create Data Lakes are making previously non-existent data available to developers, enabling them to gain better data driven insights. -Non traditional data, such as traffic information from GPS, can identify trends that show how an area is changing.
The real estate development in the future will be intertwined with Internet technologies from its inception, transforming the process of design, construction, operation, and usage. Innovation in construction has always driven the industry forward, allowing for stronger, taller and more energy efficient structures, safer work sites and increased worker productivity. However, today, new technologies are being developed at record speed and getting much attention from construction professionals and the investment community alike.
Conceptualizing & Design
Exploding availability of bandwidth will revolutionise the design and development collaboration with smart wearable devices. Increasing IOT penetration is providing insights about utilisation of spaces and efficiency of utilities. Also, requirement of 5G networks of vast antenna networks and micro data centres and shift to the cloud will in future dictate how future building will be designed. Growing importance of Wellness transcending beyond Energy Saving will also have substantial impact as it becomes measurable with new technologies.
Construction
Construction is one of the most labour and resource intensive but still the least digitised industry globally. 3D printing and Robotics will change the construction landscape drastically with improved quality and usher unimagined speeds for multiple activities. Drones will add a new dimension to the current technologies in use.
Customer Journey
Customer digital experience refers to the interactions normally with multiple persons in a non-digital process, these will be enhanced and replaced with technology using AR/VR & Bots. Technology has completely disrupted this process, empowering consumers through a more efficient and transparent marketplace wherein they can now search for homes, offices, hotels and more online at the click of a button.
PropTech has simplified the property purchase and sale process. While sellers can easily list their properties, buyers can find and compare multiple properties. Similarly, the renting process and financial transactions have also become more efficient and transparent.
With advent of Augmented and Virtual reality coupled with the increasing bandwidth the customer journey will be totally revamped to provide an unparalleled convenience and also transparency.
Ownership
Blockchain will be a game changer in improving/ eliminating various inefficiencies in Real Estate. With Blockchain the ownership of the asset can be completely tokenized allowing it to be "divided" and digitally purchased in small parts. Blockchain has also the potential to increasing transparency and reducing the risk of fraud. For most people, the hurdles of purchasing investment real estate are too great and require significant capital, expertise and hard work. Innovative real estate investment companies are solving this issue by giving investors the opportunity to purchase "shares" in a property or real estate project along with other tools, platforms and supporting services, making the entire investment process more transparent, efficient and accurate. More recently we have seen emergence of new C2C equity lending platforms that offer a new investment opportunity by connecting lenders and borrowers while offering a complementary or alternative solution to banks for funding applicants. These platforms allow both individuals and large institutions to benefit from loans for their renovation, purchase, construction or investment projects.
Property Management
The real estate industry is undergoing a major structural change in the way landlords are providing offerings to tenants. This new concept focused on "tenant experience" is redefining the way we live, work and shop. The traditional Landlords are also changing from so called rent collectors to service providers. In Property Management, PropTech solutions aims to allow property owners and landlords to manage their assets with more efficiency, ease, and flexibility by developing products and services that will save people time, money, and promote affordability. A new type of product becoming popular is PAS - Property As a Service , where in the tenant is freed of all efforts of managing the administration & overheads and the property is offered to him as tailor made service.
The Protech Wave is swelling , you cant stop nor can escape it but you can lean to surf.
Ashish Deora
