Emile Salame is the founder of Cornerstone Asset Advisors, a real estate investment advisory firm that provides a full spectrum of services to help clients identify and manage real estate assets across London. This article will look at property technology (PropTech), a relatively new dimension to the real estate market that is playing an increasingly important role.
PropTech is a catch-all term used to describe various different technological innovations created to improve the way people manage, use and transact real estate. PropTech centres around the ability to gather and analyse vast tracts of data to improve building performance and enhance user experiences.
PropTech adds value to developments in three essential ways: improving sustainability, enhancing operational performance and boosting tenant satisfaction. There is an ever-increasing emphasis on tenant experiences, particularly in the commercial property rental sector, as employees are coaxed back to the office. PropTech is being leveraged by forward-looking property managers, providing tenants with all manner of smart technologies, enhanced communication tools and data analytics to satisfy increasingly high tenant expectations. As landlords seek to optimise tenant experiences, not only within a built asset but across their entire portfolio, user engagement apps are playing a vital role, providing valuable feedback and analytical insights.
Smart building system equipment is another important area of focus. Today’s energy management systems monitor equipment from building management systems, interpreting data and responding to real-time occupancy. Potential applications and capabilities are set to only increase as AI draws information from ever-expanding data pools. For example, such systems can be used to adjust office temperatures on days when there is lower attendance, driving down utility bills without compromising the in-office experience of workers.
Today, virtually every business operating in the real estate industry relies on big data, collecting and analysing vast amounts of information. PropTech helps real estate professionals to identify emerging trends, enabling them to gain a competitive edge by enhancing decision-making and strategic capabilities. Analysing demographic, geographic and economic factors, big data is used to produce more accurate property evaluations, providing estate agents with useful insights into the needs and preferences of customers.
In person, paper contract methods are rapidly becoming outdated and obsolete, with landlords, estate agents and tenants relying heavily on digital tools to communicate quickly, view houses online and even sign contracts via smartphone. AI has enabled realtors to streamline processes, simultaneously enhancing customer experiences. In addition, AI is also being leveraged for property valuations, selective and predictive investment, and property management.
Technology has revolutionised the way people shop, live, learn, work and communicate, with digitisation dramatically reshaping business models and structures. This is largely driven by an increase in competition combined with a bid to meet rapidly evolving needs and expectations. The US Bureau of Labor Statistics predicts that the number of real estate brokers and sales agents will rise by 4% between 2020 and 2030. Meanwhile, a report published by Grand View Research suggests that the real estate market will rise from a global valuation of $3.69 trillion in 2021 by a CAGR of 5.2% to 2030.
Every industrial sector has rapidly adopted new tools to leverage the power of automation, and real estate is no exception. PropTech tools are streamlining each stage of the real estate process, connecting buyers, sellers, landlords and tenants through different technology and applications. Platforms like Redfin and Zillow are helping renters to search for properties from the comfort of their own homes, as well as offering closing tools and ancillary software services. The rising wave of PropTech innovation is transforming the real estate market on a global scale, culminating in enhanced operational efficiency, the emergence of smart buildings, improved sustainability and optimised client outcomes.
