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PropTech's Growing Impact on Real-Estate

Linda Rudd, Partner and Head of Asset Management Services, Knight Frank Australia

Linda Rudd, Partner and Head of Asset Management Services, Knight Frank Australia

‘Proptech’ is the name given to any technology for the real estate space, a merger of the words ‘Property’ and ‘Technology.’ With current estimates for future investment in Proptech placed at $20 billion (Pitcher Partners) the true impact of Proptech has not yet been fully realized. But how can companies capitalize the impact of Proptech and how might we make the right decisions that assist us to realize this value?

Each CEO, CIO, Head of Innovation, Head of Technology or group leader has a remit to execute on the business digital strategy. The way in which strategies are built can identify different business needs and the problem that needs to be solved. But companies need to prioritize their outcomes in order that they can deliver on the true impact that Proptech can provide to not only just execute on strategy but find the value and avoid the adage of ‘technology for technologies sake.’ Leveraging the impact of Proptech can be approached with five priorities in mind:

• Humanist: the way in which we can enable teams with technology

• Efficiency: the pursuit in delivering business performance

• Risk and the way in which Proptech can mitigate it

• Point of difference: to differentiatein the highly competitive markets

• Asset value: to honour our partnership with our clients and property investors and deliver value at an asset level

Humanistic
Commercial property management is a resource intensive service, whereby our solutions are delivered by our teams of people. When your product is your people, you can look at ways in which delivery of services can be enabled by technology to deliver better outcomes. Within our technology and product roadmaps we prioritize how a project might improve the livelihoods of our teams performing their everyday tasks. This can include removing the ‘points of pain’ from internal teams where you receive the largest amount of feedback on functionality, complication, or difficulty or ultimately any item that might make the role much easier to fulfil, and more easily solving the problem of adoption with a defined approach on how it will enable and not hinder teams.

Improve Business Efficiency
Encompassing all building processes, removing onerous tasks, and supplementing with automated solutions.

Built environments are fraught with risk and of critical importance is the safety of visitors and teams to the buildings under our management

This may be through automation across core processing functions in a shared service environment. The implementation of technology for internal business improvement wins recognition in part but largely concentrated to the bottom line after being offset by the cost of investment. This is also one of the most difficult selling points in terms of value with clients as incremental innovation is not as visible to clients given the scope of works under your instruction is still being delivered but in a more efficient way that largely remains unseen except by our business. The impact here is the improved delivery of our service supported by technology. It is the operational item that people may not ‘see’ being less visible than an ‘app’ but still demonstrates value in our ability to speed up processing and the positive impact on our service levels—both internally and externally, under pinning your ability to deliver services in the most efficient and effective way.

Risk Mitigation
Built environments are fraught with risk and of critical importance is the safety of visitors and teams to the buildings under our management. Proptech can be truly impactful when prioritizing risk mitigation as a key decision-making metric when we look at solutions. We have trialed the use of drones for internal atriums, which seeks to minimize the risk of working at heights and we continue to pilot across other use cases. We have also explored contractor management and the ways in which we manage the sign in and out process, monitor the welfare of our contractors to site, and thoroughly manage the induction process. This delivers on value to the many stakeholders with risk mitigation being a strategic imperative across all and a critical area in which we can leverage the impact of Proptech to deliver solutions.

Point of difference
The commercial real estate market globally is a competitive industry, with one of the biggest challenges for a real estate firm is demonstrating the value of our investment in technology to our clients to truly deliver a point of difference, empowered by our apps, digital property, and operations platforms. Finding a niche with your client base that recognizes the impact of your investment in Proptech and rewards with business or appointments is a quantitative way in which one can measure the value and impact of your investment in Proptech.

Improved Asset value
We prioritize Proptech and its ability to impact the value of the property assets under our management. This is a tougher remit to fulfil given the many funds and portfolio strategies that exist in terms of delivering value to investors. We look at ways in which Proptech will deliver value across property operations, improving strategic outcomes across financial performance, decision making, customer (tenant) engagement, risk, safety, sustainability, and any other outcomes that align to our client’s property strategies. BMS analytics has provided us an opportunity to leverage impact via improved operational performance, reduced building operating expenses, and enhanced tenant comfort. But most importantly, it has helped us deliver improved environmental performance of an asset which is a key strategic focus of so many property funds. So to are customer engagement platforms delivering extra services to our tenants and underpinning tenant attraction and retention at an asset.

Proptech is impacting the real estate industry for the positive with companies finding and leveraging ways in which the possible impacts can be fully realized. There are a myriad of products and a large opportunity that groups need to navigate to assist in the decision-making behind the implementation. Setting key metrics and priorities similar to what is listed here assists the selection process so that business can fully leverage the positive impact of technology.

See More: Top PropTech Solution Companies in Apac