To find out more about the emerging PropTech industry – which sees property and technology combining – BLM brought together a panel of experts to debate the issue.
How are the property and technology sectors working closer together?
Conrad Davies: “We carried out a major report, looking at how technology is disrupting the real estate market. The opening premise is that you have a real estate market in Europe that has been active for over 250 years and a technology sector that is very new and moving at a fast rate.
“The results of the report showed that at board level, tech is being seriously considered by companies operating in the property sector and it is driving change. The three biggest things that are set to have an impact are the Internet of Things (IOT), Big Data and 3D printing. The report also looked at how technology can drive innovation and help alleviate the housing shortage; and would have a big impact on the private rented accommodation market.”
Rob Horne: “It feels like we’re looking at the wrapping paper and not the present. At present, the technology is all the shiny stuff that is on the outside of the building but it’s the bricks and mortar that is the actual real estate. If you disassociate technology from the bricks and mortar, you’ll damage the integration of technology in the property and construction sector.”
In your view what will the real estate market look like In 2035?
David Powell: “Regarding what the Real Estate market will look like in 2035, we’re currently behind China, India and the USA when it comes to adoption but we’re catching up. The exciting part is that innovation and new technology will render projects that were previously unfeasible to build, possible. We can also expect transport to move underground, buildings to become taller and denser and nature will become part of urban architecture in the form of vertical gardens. The use of drones could also revolutionise logistic and deliveries.
“I would also say that if we look at the present, the commercial market is ahead of the residential market with regards to implementation.”
Gavin Bridge: “As a developer we’d like to embrace technology in our buildings more, but the companies that offer the products and expertise to allow us to do this – don’t seem to exist yet. For me, it’s about making buildings smarter and more interactive and looking at how technology can improve health and wellbeing.
“I feel like we’ve failed to grasp this golden moment in history and embrace technology and I believe change needs to be driven by technology companies and not the property or construction firms.
“Michelle – how is Midas responding?”
Michelle Cochran: “For us it’s all about data and information and communicating to our customers that we use this to improve efficiencies. Also we are using VR and AR to show clients how their projects will look in the end and we’re also considering offsite manufacturing too.”
HOW CAN TECHNOLOGY ALLEVIATE THE HOUSING SHORTAGE?
Paul Smith: “To help alleviate the housing shortage we’re looking primarily at offsite construction, but I’m also looking at how we better manage the twenty-seven thousand properties we’re already responsible for and integrate technology within them.
Why do we have to wait for a tenant to tell us their boiler isn’t working when the boiler itself could notify us?
“There are huge possibilities around property management and technology and how we look at retrofitting existing stock. What’s stopping this is of course money but also, it’s a leap of faith to change our way of working.”
How can technology improve our working lives?
Gavin Eddy: “There is no doubt that technology can massively impact the way that we work. The reality is that people are only spending thirty per cent of their day at their desk with their head down working.
“The other time can be spent working in other locations, sharing space and co-working and technology is accelerating this.”
Paul Smith: “Co-working is a good idea but the idea of co-living – where people use living space together with others based on their work schedule – and optimising space would drive some appalling things as people could end up cramped into space.
“We already have the lowest space standards in Europe and we don’t want to use technology to create a social breakdown – it needs to make society better. Why can’t we put residential space on the top of large buildings in the city? Because it’s land that’s the problem – we have lots of space but it’s just full of air.”
Lisa Matthews: “Technology can and should be a force for good and it can drive social change and improve social equality through data collection and the identification of people’s habits and using that data to improve lifestyles and plan transportation routes that better connect the most vulnerable.”
HOW IS TECHNOLOGY DRIVING CHANGE IN THE RESIDENTIAL PROPERTY SECTOR?
Ben Yarrow: “We have developed software that allows us to understand what experience tenants have in their properties and collects data that gives information on what it’s like to live in a town or suburb. We can then pick out trends and habits and assess the relationships between landlords and tenants.
“This data can also allow housebuilders and property developers to have an insight into where the next best place to build is.”
Nick Moir: “The skills of a good estate agent used to be around reading a customer and identifying where they may want to live and in what type of area. But the challenge for us now is that these behavioural cues are moving online, and we need to adapt.
“Technology is allowing us to speed up transactions though, which is a good thing and it’s making many aspects of the journey more efficient, but nobody is joining everything up and you have many technology companies operating in silos. If you could aggregate it all and have one piece of technology – that would put a rocket booster under the industry.”
Claire Owen: “Harnessing and interpreting data is key for improving the relationship between estate agents and their customers and this is something that my business Loop Software is able to do.
“Our technology allows estate agents to become trusted advisors and better understand their market. There is no doubt that to be successful in the future, estate agents will need to embrace technology.
HOW IS TECHNOLOGY CHANGING THE WAY CONSTRUCTION PROJECTS ARE FINANCED?
Jon Hughes: “The way construction projects are funded has changed hugely. We’ve evolved from a market where a developer would borrow money from the bank to a post-crash world where technology companies have come along, and we’ve seen the rise of crowdfunding and other online alternative finance platforms.
“This has created a mechanism whereby you can fund projects online and this kind of equity sits alongside high-street banks in the funding of major construction projects. Technology is becoming a major enabler.”
HOW DOES THE UK COMPARE TO OTHER COUNTRIES IN HOW IT IS EMBRACING TECHNOLOGY?
George Chan: “It is more forward thinking in the USA and they adopt technology much more quickly. Using VR and AR is standard in the residential property sector but that comes down to margin – as a lettings agent in the UK makes 1.5 per cent commission whereas in the USA it’s 5 per cent and this helps to fund marketing and technology use.”
Conrad Davies: “In the US there is a wall of capital that has gone into PropTech and that hasn’t happened yet in the UK. It is starting to though and there is a more vibrant investment market around the sector and when it does happen you’ll see bright minds working in other sectors that move into the property sector. Creating technology isn’t the issue – it’s the adoption of it.”