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Property technology has been around for a while but only now are major real estate firms taking notice, as disruptive technologies threaten to shake up the status quo. As MIPIM visitors noted, those who ignore proptech are at risk of being left behind. Natasha Turak reports.

Proptech was a key buzzword at this year’s MIPIM property conference in Cannes. Also known as real estate tech, the potential for disruptive tech innovations to penetrate the property sector is only now on the radar of large real estate firms, despite the concept having been around for a few years.

Proptech has gained enough traction that MIPIM hosted several panels on the topic, including ‘The impact of tech on real estate investment #proptech’, hosted by the Royal Institute of Chartered Surveyors (RICS), and a session on disruptive technologies hosted by US software corporation Autodesk.

At the RICS panel, RICS director of data products Dan Hughes said: “Property is a bit behind the curve. I think real estate is an industry where people are very happy to be the last to adopt pretty much anything.” Indeed, the property industry is known for being slow to change, despite being the largest and most valuable asset class in the world.

“Proptech is about six or seven years behind fintech – we’re certainly not there yet,” said Aaron Block, founder of real estate technology accelerator MetaProp NYC. “The pace of new companies coming up continues to increase, and from an innovation perspective, we’re seeing tech developing at an increasing rate.”

Opportunities and threats

Mr Hughes added: “Massive opportunity is going be driven by technology. Tech is a fantastic opportunity, but it’s also a huge threat.” A prime example of an innovation disrupting a highly lucrative investment sector is mobile booking app Airbnb, which is set to surpass traditional hotels in terms of booking volumes globally in 2017.

Other big proptech trends are artificial intelligence, which could replace humans in the real estate industry as it is beginning to do with driverless cars, and virtual reality, which could be used to enhance design, construction, apartment searches and more.

Across the vast Palais des Festivals venue where MIPIM took place, proptech startups displayed booths in greater numbers than in previous years. One was the aptly named Disruptive Technologies, a 30-strong startup from Bergen, Norway based in London, which has designed tiny sensors that monitor temperature, touch and proximity inside a building, giving the owner real-time data visualisations.

“This is for real estate companies that are looking after huge property portfolios. They are amazed at these tiny devices where they can get data instantaneously, with a 15-year battery life that they don’t have to install or change batteries for, and therefore their cost savings can be huge,” says Alex Storey, the company’s UK country director.

He said the company came from outside the property sector, and initially focused on hardware and software development. “A lot of innovation from outside is being pulled into property because of the market’s sheer size: the opportunity to increase efficiencies is significant. We really want to dig down into something that will solve problems for the industry, and that is what’s going to really make it disruptive.”

So what should traditional property developers do to adapt? Bob Contreau, CEO of Canadian real estate firm Altus Group and a speaker at the panel, said: “These large firms need to do what these startup companies are doing. If you’re going to get serious about this and try to innovate on a global basis, it’s about getting talent in your organisation that can do that. It takes a dedicated focus on technology that companies in the real estate industry haven’t had before.”

Phil Barrett, global chief investment officer at RICS, added: “What worries me is disruptive technology. What are we going to do when you don’t need estate agents in a few years’ time because everybody is buying their houses online?

“That could easily be here very quickly. It’s the disruptive stuff that has a direct impact on the occupier and the user of the space, and that is what I worry about. That’s the area where we will be spending a fair amount of time now as a business going forward.” 

This article is sourced from fDi Magazine
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