Property Australia

Property provoked through proptech


Could Australia’s large developers evolve from builders to data analysts? It’s entirely possible, says strategic advisor to the Centre of Digital Built Britain, Mark Bew.

Bew, who is also chairman of the global PCSG consultancy business, was in Sydney last week to take part in Smart Cities Week, hosted by the Smart Cities Council.

At a proptech breakfast moderated by the Property Council’s group executive of policy, Michael Zorbas, Bew said the real estate industry was “wrestling” with artificial intelligence, privacy, integration, security, pattern-of-life, and was only beginning to understand the implications and impacts.

The design life of a building may be 100 years, Bew said, but the lifespan of the technology within the building was roughly five. “We must change our mindsets”, and this means understanding that “the key thing is not the technology itself, but the underlying data” that the building generates, and how to keep, store and appropriately exchange it for precinct-wide benefits.

Leaders and laggards

Proptech is changing how buildings are constructed, managed and traded. MetaProp, the world’s largest early stage proptech advisory and accelerator estimates that $US12.6 billion was invested in proptech start-ups in 2017, and acquisitions will increase by 75 per cent in 2018.

Unissu, a new company established by proptech guru James Dearsley, has mapped more than 8,000 global proptech start-ups, and 200-odd of those are in Australia.

Some Australian companies are already embracing proptech. Charter Hall is working with four proptech start-ups to test virtual reality, cloud, 3D modelling and blockchain.

Lendlease and JLL are collaborating on Propell Asia, a regional accelerator that opens the entire real estate value chain to proptech start-ups.

And Stockland is working with accelerator BlueChilli to identify and develop proptech solutions that create better connected communities.

But Emma Hendry, CEO of built-form advisory Hendry Group, thinks it is still early days. “Proptech is where fintech was a decade ago,” she told the audience.

Hendry said a new perspective on proptech would drive growth. Business leaders must look beyond cost minimisation to how proptech can create new value by “affecting better conversations with customers, better people flow and greater productivity”.

Is proptech the panacea?

The conversation turned to the structural challenge in property, where it can take up to 10 years from the deal being signed to the tenant moving in to a building. There isn’t a technology sales representative on the planet who will wait a decade for their sales commission, ran an informed comment from the crowd. But the real benefits from property technology will only be extracted in the long-term operation and placemaking of the asset.

Bew said the United Kingdom was further along the journey than Australia when it comes to harnessing proptech for asset management.

“Every year we spend £90 billion creating new assets, but because we have a mature asset base, we only create one per cent each year.” Proptech – and the underlying data – were at the heart of maximising those assets.

Bew says he’s seeing big contractors in Europe now “talk horizontally rather than vertically for the first time” and “data is driving that”.

Chungha Cha, founder of Korean-based Re-imagining Cities, offered another perspective. He pointed to the 92 billion sqm of space that will be built by 2030, the equivalent to “building all of Seoul every two months continuously until 2030,” he said.

Cha was in Australia to “link up with the good talent here”, he said, because with 50 per cent of construction to occur in Asia “we need help quickly and time is of the essence”.

Technology plays a “crucial” role in achieving net zero, Cha added, pointing to the Edge building in Amsterdam, dubbed the smartest building in the world, which uses technology to “drive down costs and carbon and provide cool amenities”.

The developer responsible for the building understands the power of proptech. “It was Edge Real Estate but now they call themselves Edge Technologies,” Cha observed.

Collaborating on a digital code

Hendry wants to see a “code of ethics” for how we manage digital, data and artificial intelligence. She pointed to work undertaken in the United Kingdom to develop a “cross-sector AI code”.

No one company can undertake this digital transformation alone, she argued, “because no one company sits across the whole life of an asset”. The re-invigoration of Sydney’s Circular Quay, which was being delivered by AMP Capital, Mirvac, Lendlease and other developers, was an opportunity to get better at data sharing.

Even a year ago conversations around proptech were “very difficult,” Hendry added. “But the technology is accelerating. We don’t know where we’ll be in five years, but we can build an innovation culture.”

The advice from the proptech panel? Whether you are in government or the private sector, get digital ready – because proptech will revolutionise the industry whether we’re ready or not.