Like many industries, the Proptech space has managed to use the Covid-19 pandemic as an opportunity to innovate to meet changing customer needs and locations. With offices having to close as lockdown restrictions were put in place, property companies needed to increase their reliance on digital communication and infrastructure to maintain operations, and this is likely to continue in the future as Proptech continues to evolve.
As navigation through the pandemic continues, we take a look at what the future holds for the Proptech sector.
Disruption throughout the property space
Remote working has opened up the possibilities of more flexible hours for employees. This, combined with digital communication channels, has meant that businesses are more able to answer customer queries at any time, something that wasn’t viable with offices, which have certain opening and closing times.
As well as this being set to continue, more Proptech companies are likely to make better use of behaviour and performance data, which will lead to faster, more informed decision making, in the future.
Tom Reiss, CEO of Roby AI, explained: “I expect that in the next five years, every major property business (that hasn’t already) will leverage an element of Proptech. Whilst this is brilliant for the future of our industry, it will also have a huge impact on the property sector as a whole. Companies will be able to scale at a much faster rate and the tradition that is currently associated with the sector will start to disappear.
“Specifically, Proptech will increase accessibility when it comes to viewings – they will be available 24/7 at our fingertips. Equally, the property lifecycle will become shorter as the process gets increasingly efficient. We will also see companies continue to make more decisions based on the data that Proptech provides them with.”
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Reducing environmental impact
Climate change and environmental impact are becoming increasingly vital points of discussion within company strategy, and going forward, Proptech companies could look to leverage smart technologies, such as AI and IoT, to increase sustainability.
“The real estate sector accounts for 35% of the world’s energy consumption and new construction annually contributes over 3.5 billion metric tons of embodied carbon emissions. There is a huge potential in finding sustainable solutions to tackle these challenges and we are already seeing first movers.
“Currently this materialises mainly in the invention of new eco-friendly building materials (e.g. fenX) or less energy consuming processes (e.g. Alcemy), as well as the already-mentioned efficiency gains in building operations with the help of IoT, data analytics and AI – or ‘smart buildings’. We will also see a rise of prefabricated parts for building, as well as 3D printed buildings or parts, as this can also contribute to a reduction in emissions, while raising efficiencies on site.”
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With Proptech companies needing to increasingly digitise their operations to meet evolving customer demands, they will also need to continue paying attention to regulations, which may be equally liable to change.
Roger Tyrzyk, director of global gaming and sales for UK/I at IDnow, believes that such rules would need to be reconsidered for true innovation to occur, and that this could be increasingly prioritised by regulators in the future.
“Consumers have changed; they expect processes to be much quicker, more efficient and certainly not an inconvenience,” said Tyrzyk. “In response, the property sector – both conveyancing and rental markets – must adapt and the only way to do this is to leverage the innovative technologies that already exist.
“However, to empower sectoral change, property regulators and the Government must revisit the archaic laws that currently exist in the UK and align them with the 21st Century. For example, under current laws, every letter a solicitor sends out must be wax sealed. To deliver a truly digitised process and harness the power of Proptech, this must be addressed and overhauled.
“I see the issues surrounding the end of the stamp duty holiday as being the catalyst for this change. There is a real and urgent need for Proptech to rise up the agenda and I think we will see this happen over the next couple of years.”
What does Boris Johnson’s ‘build build build’ mean for PropTech?
Prime Minister Boris Johnson has said that he wishes to use the Covid-19 pandemic ‘to tackle this country’s great unresolved challenges’ and build more homes and key infrastructure. As new research warns social housing construction risks falling to levels last seen during the World War II, Yann Murciano, Chief Executive Officer at P2P lending platform Blend Network argues that PropTech companies, particularly peer-to-peer lenders, can and must play a strategic role towards the success of Mr. Johnson’s ‘build build build’ strategy. Read here
Increased hybrid and remote capabilities
Thomas Kessler, CEO of Locatee, expanded on the expected continuation of remote working, along with hybrid working, stating that digital technologies will play a major role in helping business leaders to optimise use of office space.
“It’s also becoming far easier to integrate smart systems into buildings via existing IT infrastructure, and this is accelerating the rate of change,” said Kessler.
“Looking to the future, I believe we can expect an influx in technologies aimed at optimising hybrid and remote working models post-pandemic.
“The C-Suite will be assessing the value-add that office space creates for the company beyond being a production resource with the associated costs, and tech will play a critical role in highlighting the ways in which staff use and enjoy the office space.”
More global success
Finally, it’s thought that in the future, the Proptech sector will continue to grow, with budding start-ups becoming larger, global enterprises.
Augustin Celier, CEO of Uptime, explained: “Proptech is still at an early stage as an ecosystem, both in terms of number of start-ups and financing available. There are many different companies trying to solve a wide range of problems in Proptech, and we still have yet to see a single platform, for example in building management, to win over the space.
“We expect in the next five to ten years that some of those early start-ups will become huge global successes, especially those that will focus on a specific vertical and maintain that focus. It’s only after that the market would enter consolidation phase, with actors – potentially those initially narrow vertical start-ups – solving a large scope of Proptech problems.
“For example, Salesforce won within the Cloud revolution with its Sales software, and is now gathering multiple software like analytics and AI around itself. These are products that used to be scattered in the early SaaS days. Now, you’ll see that large SaaS software platforms have experienced less success than those early vertical focuses like Salesforce.”