KPMG UK’s third annual Global PropTech Survey looked at the progress made in real estate’s relationship with technology over the past year. It found that 58% of real estate companies have a digital strategy in place, up from 52% in both 2018 and 2019. While 95% of real estate companies have someone responsible for leading digital transformation and innovation, only 25% of respondents have a well-established data strategy that enables the capture and analysis of the right datasets. Meanwhile, 64% of real estate companies have some form of Property-as-a-Service across their portfolio with a further 13% considering it.
According to Chestertons MENA’s head of strategic consultancy, Chris Hobden, the impact of the proptech on the real estate industry has become particularly pertinent during the current COVID-19 pandemic. For example, virtual market appraisals to help landlords and homeowners ascertain the value of their property with minimum hassle is becoming common practice.
“We can now combine up-to-date market information, tools from our research department and our large database of historical property prices to give a very accurate idea of the property value or rental rate, as well as determining the best marketing start date,” Hobden explains. “Similarly, virtual 3D tours of properties to showcase what is on offer ultimately allow potential investors to view a property in detail without leaving their home or office.”
From a research perspective, Proptech is starting to make a significant impact on the detail and speed at which building data, and in turn, wider market performance, can be measured. “As the new breed of Building Information Systems become more common across master-planned projects, we expect landlords to benefit from a better understanding of how space within buildings is being utilized and to be better placed to identify potential efficiencies and opportunities,” Hobden says.
Another pressing question is whether the digitalization of real estate will eventually replace property management companies. According to Chestertons, rather than proptech replacing a property manager, new technology should complement the personal touch a property manager offers. Although the importance of virtual tours, systems allowing for online amenity booking and energy management systems to pinpoint specific heating or A/C requirements in individual apartments cannot be underestimated, people still want to interact with a property manager.
“Proptech is an opportunity for real estate brokers and developers to ‘level up’ and improve their digital offerings. In the international market, virtual viewings are common, and the whole process can be conducted online, including money transfer, exchange/contract signing. Property managers will always be there, though, to facilitate and narrow down the search,” Hobden adds.
The increasing availability of good quality data is another major gamechanger in the real estate game. According to JLL’s head of research for MENA, Dana Salbak, with technological developments simultaneously driving down the cost and increasing the range of relevant data available, real estate owners, occupiers and investors are now able to make more informed, empirically-based decisions, on the performance of their assets.
“We have identified a progression from the traditional two-dimensional real estate data model to the current era of the 3D ‘Digital Twin’, characterised by more sophisticated digitalized records, sensor information and software integrations,” she explains. “This era is being fueled by the emergence of ‘big data’, that can perhaps best be regarded as the combining of data layers from a variety of non-real estate providers.”
There is little doubt that the amount of data available to real estate players is increasing at an exponential rate. According to Salbak, the real question today is how to manage this data in such a way that it becomes a benefit rather than a burden. “In this era of data overload, the old adage of ‘identifying the wood from the trees’ has become even more critical. Those businesses that can successfully utilize the proliferation of new data in a profitable manner will be those that thrive in the digital economy.”