How PropTech is revolutionising real estate
Why the future of real estate is PropTech
It's an exciting time to be in real estate right now. Property technology, or PropTech as it's commonly known, is starting to make its presence felt both in the residential and commercial property sector. And, while it has a long way to go before it reaches the level of disruption FinTech has achieved in financial services, it will usher in big changes over the next few years.
Should we, as real estate professionals, be worried? Not at all. Rather than seeing it as a threat, at JLL we are embracing the opportunity PropTech offers us to transform the way we do business – and I'm not just talking about the transactional side of things. Yes, PropTech will help the industry streamline transactions but it has the potential to provide us with richer, data-based intelligence.
Why real estate is ripe for disruption
We're at an interesting juncture in real estate, a tipping point if you like. Until now, PropTech has been slow to materialise, partly because the wider industry has been slow to innovate; compared to financial services, things move at a much slower pace and there hasn't been the same level of focus to come up with the next big thing – be it an app, an online platform or algorithm. So innovation is taking longer to emerge but PropTech has the same potential to disrupt, and early adopters will have the edge.
Residential takes the lead in PropTech
On the transactional side, tech innovation has had much more of an impact on residential than commercial property. I think that's because residential sales is consumer-facing and, as we know, it is the consumer who drives innovation.
Changing role of the property agent
At the smaller end of the commercial property market there are opportunities to mirror some of the successes PropTech has had in the residential sector, where transactions could become more automated across online platforms. However, at the other end of the market where you're dealing with hundreds of thousands of square feet, this isn't practical. It's a huge undertaking that requires the expertise of a property agent who adds market based and technical experience; experience and knowledge which will make the difference between striking an exceptional deal or a bad deal. So, what I think we'll see over the next five years is a dramatic change in the role of the traditional agent, from broker to adviser.
Data gives rise to the intelligent building
Technology is also making its presence felt in the built environment. Data-monitoring points in buildings can now analyse anything from energy usage and CO2 production to how often a desk is occupied. With more people working in places other than their desk – at home, in coffee shops as well as communal areas in the building – companies can free up desk space for other purposes.
This has, in turn, led to the emergence of hoteling, a fluid system whereby employees work in different zones and don't necessarily sit with the same team or at the same desk every day.
The next step, in my view, is the personalisation of the workplace. So, for example, a worker able to use their smartphone to order a coffee, which will be ready for them to pick up in the office coffee bar a few minutes later. Employees who are able to set the optimum level of lighting and temperature when they book a meeting room. The same principle can be applied to the employee's workspace area. We look in detail at what offices of the future will look like in our recent report Workspace, reworked.
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Get in touch with Michael Davis by email or on +44 (0)207 399 5782.